OUR MISSION S HelpUINcceedg cUStOMeRS · 002 "//6"-3&1035 rmESiNiAgA 32 nd AnnuAl GenerAl MeetinG VENUE AuditoriuM isMAil sulAiMAn MenArA MesiniAGA 1A, JAlAn ss16/1 47500 subAnG JAyA

001annual report 2013 • MESINIAGA

ANNUAL REPORT 2013

OUR MISSION

HelpINg cUStOMeRS

SUcceed

002 annual report 2013 • MESINIAGA

32nd

AnnuAl

GenerAl MeetinG

VENUEAuditoriuM isMAil sulAiMAn MenArA MesiniAGA1A, JAlAn ss16/147500 subAnG JAyA

TimEwednesdAy, 18 June 20142.30pM

in 2013, we made a pledge to help customers succeed. we remain committed to this mission, aiming to have a profound impact to customer business by improving their efficiency and increasing business potential.

in every challenge, we recognise anopportunity to learn and grow. this, too, applies to our approach in addressing customer business difficulties. by turning challenges into opportunities, we make the best of all situations for a successful business outcome – both for us and our customers.

our MissionHelpinG CustoMers

SUccEEd OUR ViSiONto be tHe MAlAysiAn it pArtner of CHoiCe

OUR miSSiONHelpinG CustoMers suCCeed


012 Chairman’s statement016 Managing director’s report022 five-year performance statistics023 2013 share performance statistics024 Company Happenings 030 Corporate responsibility

• OurVisionandMission004 Corporate profile008 Corporate information009 Corporate structure

038 board of directors 043 senior Management team048 Awards and partnership status 049 statement of Corporate Governance053 statement of directors’ responsibility in relation to

financial statements054 statement on risk Management and internal Control056 Audit and risk Management Committee059 other information required by the listing

requirements of bursa securities

060 financial statements

129 properties owned by the Group130 shareholding statistics133 notice of 32nd Annual General Meeting134 Additional statements134 notice of dividend entitlement• ProxyForm

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Acceleratingcustomerbusinessperformancetomaximisepotential

DeliVeringcustOMer

SUccESS



CorporAtePROfiLE

mESiNiAgA has been in the technology business for the past three decades. we started out as a company selling ibM office products and have now evolved into a multi-platform business solutions provider with a paid-up capital of rM60.4 million. within the last 30 over years, the technology landscape has changed tremendously. new trends have emerged resulting in a sea of change in the way companies do business. Across the board, companies these days are constantly on the lookout for solutions that will give them an edge over their competition. As such, we are constantly striving for ways to provide ourcustomerswithanexperiencethatwill allow them to achieve their business objectives.

Leading Partnership Status• IBMPremierPartner• MicrosoftGoldPartner• CiscoGoldPartner• SymantecPlatinumPartner• JuniperElitePartner• TrendMicroAffinityPlatinumPartner• VMwarePremierPartner• OracleGoldPartner• HPGoldPartner• APC(SchneiderElectric)ElitePartner• HitachiDataSystemsGoldPartner

incorporated on 17 december 1981

paid up capital of

Rm60.4million

listed on bursa securities(Main Market) on17 November 1999

staff strength of more than

900 employees

Headquarters

SUBANg JAyA Key office locations

o mesiniaga Alliances, Bangsar South

o mesiniaga Warehouse, USJ, Subang Jaya

o mutiara mesiniaga, Pulau Pinang

o mesiniaga Johor Bahru


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corporate profile

mESiNiAgA SOLUTiONS mAP

BUiLdWebuildreliableandscalableICTsystemsforanybusinesses.Regardlessoftherequirements,wedeliverthebuildingblocksneededforasolidICTinfratructure.

mANAgEWeprovidesolutionsthatallowbusinessestomeasuresystemperformance.ThesolutionsmonitorandalignsystemprocessestoresourcestherebyensuringoptimumperformanceandavailabilityofICTinfrastructure.

AccELERATEWeofferasuiteofcutting-edgesolutionstoprovidebusinesseswithacompetitiveedgethatwillmaximisebusinesspotential.

SUPPORTWeextendcontinuoustechnicalassistance,maintenanceandcoveragethroughouttheentireICTarchitecture.

AdViSEWeprovidestrategicconsultationandconceptualisationthroughouttheICTarchitectureensuringthatsystemsachievethebestfitwithorganisationalrequirements.

PROTEcTWesafeguardbusinessesfrombothexternalandinternalICTthreatstherebyensuringsystemsecurityforsmoothbusinessflowandpeaceofmind.

ThisiswhywehavemadeitourMissiontoHelpCustomersSucceed, by delivering technology and business solutionsto improve customer’s business efficiency, productivityand competitive edge, as well as to create new businessopportunities for them. In order to fulfil our Mission, itis imperative that we understand their business needs,environmentandchallenges.Thisisachievedthroughcloseengagementwithcustomers,applyingindustrybestpracticesandmaintainingabusiness-orientedapproach.

Anotherimportantelementinenhancingcustomerexperienceisinthemanagementofcustomersatisfaction.Tothiseffect,we have implemented multiple initiatives that are aimedat improving service delivery and our understanding ofcustomerneeds.Ourpeople are alreadyacknowledgedashaving superior technical skills,mainly becauseweactivelyencourage them to pursue or upgrade their professionalcertifications.Theyalsoundergonumeroussoftskillstrainingsessionsinordertoimprovetheirunderstandingofcustomerrequirementsandhowbesttomeetthem.Theendobjectiveoftheseinitiativesistogiveourcustomerstheleastpossibleworryintheirdealingswiththecompany.

We believe that the strategies implemented for drivingcustomer business performance and enhancing customersatisfaction will ultimately translate into improving our ownbusiness performance. This will allow us to reward ourshareholdersfortheirfaithinus.Inordertofulfilthispromise,wehavealsomadeacommitmenttoimproveourproductivityyield.Wearenowacompanyofmorethan900employees.Wehave investedsignificantly indevelopingmeasurementsoverourresourceutilisationbecause it is imperativethatallourresourcesareemployedtotheirmostoptimumpotential.

AlloftheseeffortsareundertakentoensurethatMesiniagaremainsaforcetobereckonedwithintheITindustry.


east Coast• KotaBharu• KualaTerengganu• Kerteh• Kuantan• Raub• Temerloh

northen region• AlorSetar• Langkawi• Kangar• PulauPinang• Butterworth• SeberangJaya• Kulim• SungaiPetani• Taiping• Ipoh• TelukIntan

Central region• SubangJaya• KualaLumpur• PetalingJaya• ShahAlam• Putrajaya• Bangi• Klang

southern region• Seremban• Melaka• Muar• BatuPahat• Segamat• JohorBahru

corporate profile

AlorSetar

PulauPinang Butterworth

Taiping

Ipoh

Kulim

Kangar

Langkawi

SeberangJaya

TelukIntan

KotaBharu

KualaTerengganu

Kerteh

KuantanRaub Temerloh

SubangJayaPetalingJaya

KualaLumpurKlang

SungaiPetani

ShahAlam

PutrajayaBangi

Seremban Melaka

Segamat

Muar BatuPahat

JohorBahru

nationwide service locations


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Sibu

Miri

KotaKinabalu

Labuan

Sandakan

LahadDatu

SriAman

Bintulu

east Malaysia• Kuching• Sibu• Miri• Limbang• SriAman• Bintulu• KotaKinabalu• Sandakan• LahadDatu• Labuan• Tawau

corporate profile

Limbang Tawau


CorporAteiNfORmATiON

NOmiNATiON ANd REmUNERATiON cOmmiTTEEVOONSENGCHUAN(Chairperson)WONGFOOKHONIR.DR.MUHAMADFUADABDULLAH

AUdiT ANd RiSK mANAgEmENT cOmmiTTEEABDULTALIBBABA(Chairperson)WONGFOOKHONDATO’ABRASHIDMATADAM

iNVESTmENT cOmmiTTEE VOONSENGCHUAN(Chairperson)MOHDPUZIAHAMADWONGFOOKHONFATHILISMAIL

cOmPANy SEcRETARyJASNIABDULJALIL(MACS 01359)

cOmPANy REgiSTRATiON NUmBER79244-V

REgiSTEREd OfficE 11thFloor,MenaraMesiniaga1A,JalanSS16/147500SubangJayaSelangorDarulEhsanTel :03-56358828Fax:03-56363838

AUdiTORS PRICEWATERHOUSECOOPERSLevel10,1SentralJalanTravers,KualaLumpurSentralP.O.Box1019250706KualaLumpurTel :03-21731188Fax:03-21731288

PRiNciPAL BANKERS CITIBANKBERHADSTANDARDCHARTEREDSAADIQBERHADMAYBANKBERHADHSBCAMANAHMALAYSIABERHAD

SHARE REgiSTRARSYMPHONYSHAREREGISTRARSSDN.BHD.Level6,SymphonyHouseBlockD13,PusatDaganganDana1JalanPJU1A/4647301PetalingJayaSelangorDarulEhsanTel :03-78418000Fax:03-78418008

STOcK EXcHANgE LiSTiNgMainMarketofBURSASECURITIES

•dAtuK wAn MoHAMed fusil (Chairman and Executive Director)

•fAtHil isMAil (Managing Director – Until 31 December 2013)

•MoHAMed fitri AbdullAH (Managing Director – From 1 January 2014)

BOARd Of diREcTORS

• MoHd puZi AHAMAd

• VOOnsengcHuAn

•Abdul tAlib bAbA

•wonG fooK Hon

•dAto’ Ab rAsHid MAt AdAM

• ir. dr. MuHAMAd fuAd AbdullAH


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CorporAteSTRUcTURE

mESiNiAgA SERVicES SdN. BHd.Provisionofmaintenanceandmanagedservices.

cUSTOmcOdES SdN. BHd.Provisionofdesign,developmentandimplementationofbusinesssolutionsrelatedtobusinessintelligence,businessanalytics,customisedapplicationsandsoftwareproducts.

mESiNiAgA SSO SdN. BHd. Undermembers’voluntarywinding-up.

mESiNiAgA TEcHNiQUES SdN. BHd.Undermembers’voluntarywinding-up.

VA dyNAmicS SdN. BHd.Salesofnetworkingcablesandrelatedproducts.

mESiNiAgA ALLiANcES SdN. BHd.ProvisionofstrategicIToutsourcingservices.

mESiNiAgA mSc SdN. BHd.Provisionofsolutionservicesandtechnology,researchanddevelopment.

100%

100%

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100%

100%

100%

51%


providing best-of-class products, skills and services

enHAnCinG our

cAPABiLiTiES



<< dATUK WAN mOHAmEd fUSiL Chairman

CHAirMAn’sSTATEmENT

for the financial year ending 31 december 2013, the group incurred a net before tax (NBT) loss of Rm3 million against revenue of Rm281 million, whereas in the previous year, the group achieved a profit before tax of Rm16 million against revenue of Rm326 million. The group’s financial position remained stable with a net cash position of Rm18 million as at 31 december 2013.

DeArVAlueDsHAreHOlDers,


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BUSiNESS ENViRONmENT ANd gROUP fiNANciAL OVERViEWin 2013, we operated in an environment fraught with uncertainties. As a maturing market, Malaysia was affected by the economic slowdown in China and the eurozone, as well as volatility following uncertainties over monetary policy adjustments in advanced economies. this had caused the ringgit to ease against most major and regional currencies. domestic uncertainties during the run-up to the 13th General election (Ge13) also affected the ringgit’s performance. Apart from affecting our costs, the weakened ringgit caused us to experience a year-on-year opportunity loss ofrM5 million.

Malaysia registered a Gdp growth of 4.7% for 2013, a deceleration from 5.6% in 2012. this growth of 4.7% was mainly driven by private investment and consumption. public consumption moderated as the Malaysian government consolidated its fiscal position. Federal government expenditure was anestimated rM45.1 billion in 2013 compared to rM46.9 billion in 2012 – its lowest since 2008*.

the private sector was also cautious in their spending in the face of global uncertainties. this had an effect on the local enterprise it market growth. Although it increased 6.8% to about rM17 billion in 2013**, the rate of increase was

slower when compared to overall growth. it services sales was the fastest growing segment in enterprise spending that rose to rM5.3 billion in 2013**.

the Group’s loss was mainly the result of significantly lower revenue from public sector sales. this was apparent from our quarterly results where we experienced a year-on-yeardrop of 23% and 24% for the third quarter (Q3) and fourth quarter (Q4) of 2013 respectively. this phenomenon was anomalous when compared to trends from previous financial years where the third and final quarters made up 60% of our annual revenue. As an organisation with substantial fixedcosts, suchadecline inrevenue had a significant impact on the Group’s profit.

OPERATiONS OVERViEWin 2013, we increased efforts to strengthen operational efficiency. one measure was the creation of a Chief operating officer (Coo) position in order to enhance organisational capacity and productivity. As our new Coo, Goh seeWeeemployedhisconsiderableexperiencein it operations management to revamp our delivery organisation structure and completed thisexerciseinDecember2013.Alongwiththisreorganisation, the Group’s senior leadership was further strengthened by the infusion of new talents to head several divisions.

chairman’s statement

* Mof 2013/2014 economic report-public sector finance** business Monitor international Malaysia information technology report Q1 2014



we chose to enhance our organisational capacity by going through the Capability Maturity Model integration (CMMi) assessment and we are happy to report that our compliance was at level 3 – the highest being level 5. CMMi is a model which demonstrates an organisation’s commitment to best practices in software development. we also persevered in our efforts to boost service delivery. productivity tools such as workforce+, and it service management solutions such as servicenow® will ensure that our deliverables to customers are not compromised and at the same time allow us to manage costs better. we also plan to offer these solutions to our customers. to this effect, we have recently entered into a strategic partnership with servicenow, inc. to become one of their resellers and implementers in Malaysia.

in 2012, we embarked on several exercisesto contain our costs. one of which was to implement a partial hiring freeze. this carried on last year and headcount numbers dropped by nearly 15% from January to december 2013. While we wanted to trim excessresources, we also recognised the value of talent retention. As such, we maintained various development programmes for employees such as the Management; and technical leadership development programmes.

we furthered our attempts in advancing human capital development by engaging suhaimi sulong in March 2014 as our new director of Human resources, whose focus would be to strengthen employee performance management and engagement. we are confident that his extensiveexperiencewill ensure thatwehavethe right talents to help accelerate our business performance.

cORPORATE gOVERNANcE ANd RESPONSiBiLiTythe Group remained dedicated in our adherance to new laws and regulatory measures to improve governance such as the Competition Act 2010, enforced in 2012; and the personal data protection Act 2010, enforced in 2013. As such, we formulated the necessary policies and included them in our business Conduct Guidelines and employee eHandbook.

As with previous years, we continued all practices we had committed to under the Mesiniaga CAre framework. in areas of community relations, we maintained our collaboration with the Ministry of Higher education by providing work-based-learning courses to Advanced diploma in network students from politeknik ungku omar. As part of our community service, our social club, Kelab islah dan Amal Mesiniaga, initiated various programmes such as visits and donations to the rural poor in trong, perak, and feeding the homeless in Jalan Melaka, Kuala lumpur.

“

“

Productivity tools such as Workforce+, and iT service management solutions such as ServiceNow® will ensure that our deliverables to customers are not compromised and at the same time allow us to manage costs better.


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fUTURE OUTLOOK ANd PROSPEcTSWhile Malaysia is expected to maintain itsgrowth rate in 2014, this will be mainly supported by domestic demand as emerging economies will still be vulnerable to stimulus measures by the us. the ringgit is not expected to havea strong upside this year and there is also an expectation that Bank negara Malaysia mayincrease the overnight policy rate (opr) if the situation warrants it.

the Malaysian government will also continue to consolidate its fiscal position in order to reduce its Gdp deficit. nevertheless, the government’s fiscal reform will not be at the expense ofmeasures to accelerate the effectiveness and efficiency of public service delivery. Measures relating to improving productivity, increasing automation and adoption of new technologies will be on-going and we see it playing a strong role in this.

As such, the group expects to recover anddeliver a profitable 2014. However, our outlook remains conservative considering the global economic uncertainties that are still present. As mentioned above, we have taken the necessary steps to enhance our operational efficiency. More steps will be taken as we move forward into the year. we will also be focusing on improving our order book by securing business that was deferred in 2013.

diVidENdSdespite registering unfavourable results on our 2013 profitability, we improved our cashflow and borrowings position. As such, the board is pleased to propose a first and final single tier dividend payment of 10 sen per share, subject to shareholders’ approval at the upcoming 32nd Annual General Meeting.

AcKNOWLEdgEmENTSi take this opportunity to thank my fellow directors for their invaluable service and advice, especially to fathil ismail who stepped down as Managing director on 31 december 2013. the Group is indebted to fathil for his contribution during his tenure as Managing director, and we would like to express our appreciation of hiscontinued presence on the board. i am also pleased to welcome fitri Abdullah on the board as our new Managing director in January 2014. Withmore than twodecadesof experience inthe iCt industry in both local and international settings, as well as proven track record while holding senior positions in several well-known organisations; i am confident that fitri will be able to steer Mesiniaga into achieving our mission of Helping Customers succeed.

on behalf of the board, i wish to thank all employees and the management of the company and its various subsidiaries for their support. finally, our appreciation goes to our shareholders, customers and business associates for their unremitting faith.

dATUK WAN mOHAmEd fUSiLCHAirMAn


<< mOHAmEd fiTRi ABdULLAH Managing director

MAnAGinGdiREcTOR’S REPORT

it is indeed a great honour for me to lead mesiniaga – a company with a long thirty-two year history of success, a strong reputation in the information Technology industry, and one of the most established Systems integrators (Si) in malaysia today.

DeArVAlueDMesiniAgAsHAreHOlDers,


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managing director’s report

Having been on board for several months, my ambition is for mesiniaga to be the leading iT company in malaysia with a high performance culture, where teamwork, collaboration and innovation are at the heart of our business and all employees are aligned towards delivering success to our customers on a consistent basis.

“

“our 2013 financial results were not favourable and it reflected a very challenging and competitive business climate in Malaysia. it also exposedsomecapabilitygapswithinMesiniagawhich arose from the expansion of our sicapabilities beyond infrastructure integration (it and networking) services into areas such as application development, mobility, and it managed services. My appointment as the new Managing director comes with the challenging task of delivering better financial results for 2014 as an immediate focus while setting the foundation for the company to ensure future success. Having been on board for several months, my ambition is for Mesiniaga to be the leading it company in Malaysia with a high performance culture, where teamwork, collaboration and innovation are at the heart of our business and all employees are aligned towards delivering success to our customers on a consistent basis. this will take some time as we introduce new processes and systems, as well as add new capabilities within Mesiniaga.

As we go further into 2014, lower sales in the second-half of last year; coupled with on-going recovery of some troubled projects; as well as a very competitive market landscape will put some short-term strain on our financial performance for this year. following this, the key focus of our efforts will be in addressing capability gaps and strengthening our overall business fundamentals. these include reinforcing our project management capabilities, stronger customer engagement; improving people productivity measures; enhancing our bidmanagementprocess;expandingourorderbook; as well as augmenting our products and services portfolio. these initiatives are calculated to help us strengthen business operations by minimising potential leakages and enhancing overall customer satisfaction, which in turn, will help improve our overall cost management as a company.


we have also developed a deeper understanding of our company objectives and incorporated them into a company-wide balanced scorecard.this will serve as our strategy performance management tool which will help sharpen our focus on overall company performance. the balancedscorecardwillbeasignificantfixtureand will be used to reinforce, implement and drivetheexecutionofourcorporatestrategybyour employees. this is to ensure that we maintain a balanced focus with regards to customers, employees, operations, and capabilities as we demonstrate strong authentic leadership and teamwork, as well as a high performance culture to deliver our financial targets consistently.

our plans include moving up the value chain in terms of offering solutions beyond infrastructure integration services in order to differentiate Mesiniaga from the market. Apart from building up new solutions within Mesiniaga such as the development of new intellectual property (ip), we will also be focusing on vertical solutions in the telecommunications and financial services industries which will bring us the added bonus of higher margins. one such initiative that we have invested heavily previously is the smart developments solution, aimed at escalating the success of property developers by enabling them to offer a more enriching experience totheir residents. it is encouraging to note that

cUSTOmERdelivering Customer success:•strongcustomerengagementvia: • shareofWallet • Business-orientedapproach•Highcustomersatisfaction

cAPABiLiTybenchmarking against best-in-Class:•Portfolioofproducts&services (including ip development)•Projectmanagement• technicalexpertise

EmPLOyEEbeing the best it employer:•Professionaldevelopment&

career enhancement•competitiveremuneration&rewards•strongemployeeengagement

OPERATiONSDeliveringOperationalexcellence• Financialmanagement•salesmanagement•Bidmanagement•Projectmanagement

LEAdERSHiP TEAmWORK

cULTURE

fiNANciAL TARgETS• PROfiT• REVENUE gROWTH


OUR BALANcEd ScOREcARd, dEVELOPEd TO BE A STRATEgy PERfORmANcE mANAgEmENT TOOL


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i see 2014 as a transition year for us as we proceed to implement many business initiatives to improve our overall business fundamentals, capabilities and competitiveness in the market.

smart developments has seen strong interest in the market place. besides current deployment for a property development, we are currently in discussions with several other developers on implementing this solution as well.

As mentioned above, a key focus area for us will be to strengthen project management skills, and to develop technical capabilities for new technology trends which include cloud, mobility, big data and application development. we will continue to invest in the capability of our Concept proposal unit which we had established previously with the aim of ensuring a business-oriented engagement approach with our customers. this capability will now be complemented by industry experts to ensurethat we are able to provide our customers with leading edge solutions. Apart from acquiring highly qualified and experienced talents, wewill also be making significant investments in enhancing current talents within the company. this is where our new director of Human resources (Hr) will play a key role in supporting this very important business initiative. Among others, Hr will be concentrating on strengthening leadership, talent management, enhancing employee engagement and driving a high performance culture.

i am optimistic that our business performance for 2014 will improve over that of the previous year. Consequently, i see 2014 as a transition year for us as we proceed to implement many business initiatives to improve our overall business fundamentals, capabilities and competitiveness in the market. if we are able toexecutewellin2014,wewouldhavebuiltastrong foundation for Mesiniaga for the future and live up to our mission of Helping Customers Succeed by delivering technology and business solutions to improve their business efficiency,

“productivity and competitive edge, as well as to create new business opportunities.

i wish to express my appreciation to ourcustomers, business partners, employees, and fellow board members for their loyalty and continued support through these challenging times, and i thank our shareholders for your patience and loyal support as we build a strong roadmap for success in Mesiniaga.

mohamed fitri AbdullahMAnAGinG direCtor


“


nurturinG GrowtH witHin tHe

ORgANiSATiON encouraging employee development and enrichment


nurturinG GrowtH witHin tHe

ORgANiSATiON

022 AnnuAlrePOrt2013•mESiNiAgA

0

Revenue(rM Million)

fixed Assets(rM Million)

Profit Before Tax (rM Million)

Net Tangible Assets(rM Million)

Net current Assets(rM Million)

Shareholders’ Equity(rM Million)

380

68

26 140

360

67

24 135

340

66

22 130

320

65

20 125

300

64

18 120

280

63

16 115

260

62

14 110

240

61

12 105

220

60

10 100

200

0

0 0

67 67

16

135

281

63

(3)

115

298

21131

322326

18

140

264

6060

12

129

‘13

‘13

‘13 ‘13‘12

‘12

‘12 ‘12‘11

‘11

‘11 ‘11‘10

‘10

‘10 ‘10‘09

‘09

‘09

190

180

170

160

150

140

130

120

110

100

0

183

167

184179 178

‘13 ‘12 ‘11 ‘10 ‘09

‘09

FiVe-YeArPERfORmANcESTATiSTicS

190

180

170

160

150

140

130

120

110

100

0

183

167

184179 178

‘13 ‘12 ‘11 ‘10 ‘09

023AnnuAlrePOrt2013•mESiNiAgA

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Jan feb mar Apr may Jun Jul Aug Sep Oct Nov dec

low 2.05 2.03 2.08 2.06 2.16 2.16 2.12 2.05 2.13 2.17 2.14 2.12

High 2.11 2.09 2.20 2.31 2.46 2.52 2.22 2.23 2.22 2.23 2.24 2.24

Close 2.08 2.09 2.10 2.17 2.46 2.18 2.12 2.18 2.22 2.20 2.18 2.14

Low

High

Close

rM2.5

2.0

1.5JAn feb MAr Apr MAy Jun Jul AuG sep oCt nOV deC

2013 sHArePERfORmANcESTATiSTicS


CoMpAnyHAPPENiNgS

2013 year-Start and mid-year Kick Off meetings

WeheldKickOffmeetingsinKlangValleyandPenangatthebeginningandmidpoint of the year to update employees on company performance and direction for the year. the events were held at Menara Mesiniaga and Mutiara Mesiniaga for Klang Valley and Penang respectively. We gave recognitionto our long-service employees and high performers who received awards in appreciation of their contributions to the company.

mesiniaga 31st Annual general meeting (Agm)

our 31st AGM was held on 19 June 2013 at the Auditorium ismail sulaiman, Menara Mesiniaga. it was attended by all members of the board and more than 100shareholdersandproxies.

celebrating Outstanding Performance

we organised lunch and dinner events in recognition of employees who delivered outstanding work performance. the stAr Award recognised staff members for accomplishments in their individual roles while the HpC Award was given to employees who achieved their quota. we also gave recognition to team members of successful projects by treating them to appreciation lunches.


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company happenings

Enhancing Employee Engagement

in an effort to enhance employee engagement, we organised a series of Comms2u sessions which provided company and divisional updates to employees. we also conducted town Hall meetings which served as a platform for two-way communication between employees and the senior management. these events were held at the Auditorium ismail sulaiman, Menara Mesiniaga.

mesiniaga Trophy futsal challenge

As a way of promoting healthy lifestyle and spirit of teamwork, a futsal tournament was held on 8 June 2013 at subang Grand sports planet arena. twelve teams competed to win the Mesiniaga trophy, and the Mendung Cf (A) team emerged as the champion.

Achievement of cmmiLevel 3 compliance

we were proud to have been assessed to be compliant with level 3 of the Capability Maturity Model integration (CMMi). by achieving this classification, it demonstrated our commitment to use established best practices in our overall software development practices.


company happenings

Optimise Your Performance in a Virtual Infrastructure Seminar

we organised a seminar to showcase the importance of shifting towards virtualisation and cloud computing for business performance enhancement. the event was held on 30 January 2013 at the business productivity Centre, Menara Mesiniaga.

ISMS Compliance: Act Now Seminar

we held a seminar to enhance awareness on information security Management system and the importance of ensuring adequate and proportionate security controls. the event was held on 21 february 2013 at pullman putrajaya lakeside Hotel.

mesiniaga Academy New intake

we welcomed a new batch of Mesiniaga Academy students on 17 June 2013. these politeknik ungku omar students went through a work-based learning programme in various it areas. this programme was part of our corporate responsibility initiative in providing practical training to youths, while at the same time contributing to the nation’s human capital development.


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A Way to Empower, Simplify, Manage and Secure Your End-User Computing Seminar

togetherwithtrendMicro,VMwareandecs,weorganisedaseminaraimed at providing knowledge on how desktop virtualisation can benefit end-user computing. the event was held on 3 April 2013 at sime darby Convention Centre.

company happenings

Get Serious with Mobility Seminar

we partnered with symantec and samsung to organise a seminar showcasing how mobility solutions can add value to an organisation’s business by increasing productivity and profitability. the event was held on 5 June 2013 at Aloft Kuala lumpur sentral Hotel.

Solutions Open day in Penang

we organised a solutions open day on 25 June 2013 at the eastern &OrientalHotelPenang.theeventwasthemed“MovingAheadwithMobility” and demonstrated the capabilities of mobility solutions in enhancing customer business productivity.


company happenings

Virtualising Business Critical Apps Seminar

We partnered with VMware to organise a seminar which showcased thetremendous benefits of virtualisingsAP,Oracle, sQlexchange and otherimportant business applications. the event was held on 31 october 2013 at thegardensHotel&residences.

IBM Knowledge Management Seminar

we organised a seminar to demonstrate how customers can create, share and use the collective knowledge of its products, processes and people to increase workplace productivity. the event was held on 5 december 2013 at the business productivity Centre, Menara Mesiniaga.


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company happenings

mEdiA APPEARANcES iN 2013

mesiniaga appoints new md


cORPORATE RESPONSiBiLiTywe view Corporate responsibility (Cr) activities as strategic tasks that will integrate our business and employees with the surrounding community and environment, while creating sustainable value for the company and all our stakeholders. this is in line with the Mesiniaga CAre framework which is reflective of our long-term commitment to sustainable development.

PARTNERSpromote good business conduct by effecting fair and ethical transactions.

EmPLOyEESCreate an environment which

is conducive to employeewellbeing, careerdevelopment and

productivity.

iNVESTORSensure good corporate

governance through compliance, transparency

and accountability.

ENViRONmENTMinimise impact to the

environment through green efforts and technology.

cUSTOmERSenhancecustomerexperience by understanding their needs,

keeping promises and delivering value.

cOmmUNiTyinitiate or participate in

sustainable programmes which are geared towards

nation building.


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corporate responsibility

PROmOTiNg BUSiNESS ETHicS ANd BEST PRAcTicES we are committed to ethical conduct and our statement on Corporate Governance also makes clear our commitment in complying with all other regulatory requirements. the Mesiniaga business Conduct Guidelines – a stated policy in the employee e-Handbook, defines our expectations for our employees’ ethicalbehaviour. the guidelines cover areas of personal conduct, fairness in business, relationship with other organisations, use and dissemination of proprietary and confidential information; and fraud. we continue to maintain our iso 9001:2008 accreditation and we remain committed in supporting the use of genuine software by instituting good software asset management practices. we strived towards adhering to any new measures such as the Competition Act 2010, enforced in 2012, and the personal data protection Act 2010, enforced in 2013. we also improved our internal policies on ethics practice and sexual harassment by enhancing thereporting process flows.

ENSURiNg WORK-LifE BALANcE we strive to create an employee-friendly workplace and are committed to promoting work life balance. our office premises are equipped with facilities such as a swimming pool, a recreational room and a nursing room. employees can play miniature golf, pool, video games and darts in the Chill8 recreational area. we subsidise a portion of our employees’ aerobics classes and external gym membership. table tennis, futsaland badminton matches are held weekly and also funded by the company.

the Mesiniaga sports and recreational Club (MsrC) and the penang recreational Club (prC) are on hand to organise a range of fun social activities from futsal matches to golf and badminton tournaments. we also promote health awareness and good financial practices with our yearly Mesiniaga Health week and finance week events.

promoting comradeship and spirit of togetherness at the fusil Cup golf tournament



fOSTERiNg iNNOVATiON, cELEBRATiNg diVERSiTyCommunication is at the heart of how we do business. we also foster an environment that celebrates diversity and innovation. with our diverse backgrounds, new and exciting ideasare constantly formed towards improving and growing the company.

there are many avenues for formal communication to ensure proper and consistent dissemination of information to employees. the year-start and Mid-year Kick off events, MesiniagaComms2u sessions and town Hall meetings are some of the formal communication avenues that allow our senior leadership team to impart important information on company goals and direction. thesesessionsprovideanexcellentplatformforopen dialogue with employees on their feedback and concerns.

we hold coffee sessions and roundtable sessions with the senior leadership team to enhance engagement with employees, as they involve a small group of employees at a time. it is also an excellentwaytoensureemployeesgetadequateface time with the senior leadership team.

our other practices include an open door policy, as well as an ideas submission programme for employees to contribute suggestions on how to improve the workplace.

we believe that employee development is an investment towards our future. A highly skilled workforce is imperative if we are to sustain our success. we formulate programmes for employee development and provide them with the opportunity to explore new areas throughinternal transfers. furthermore, employees enjoy partial tuition fees reimbursement when they enrol for courses in tertiary institutions. in 2013, we invested up to 1.8% of our total staff cost for training and skills development purposes.

cREATiNg A HEALTHy ANd SAfE WORKiNg ENViRONmENTworkplace health and safety are of the utmost importance to us. we identify, implement, monitor and reinforce a healthy and safe environment through company policies, compliance with laws and regulations, commitment from top managementandorganisedactivities.examplesof safety-related policies include the Health and safety policy, fire safety policy, smoking policy, first Aid policy and infectious diseases outbreak policy. the Human resources department works together with our emergency Management team (eMt) to monitor the enforcement of these policies.

Wewill continue to execute various health andsafety-related activities as a follow-through from these policies to ensure a continued safe and healthy working environment.

encouraging stronger employee engagement through town Hall meetings


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High achievers and top talents are chosen and enlisted in the Accelerated development programme which not only aims at enhancing employee development, but also acts as an added assurance of a succession of dynamic future leaders.

we believe that workplace diversity can contribute positively towards creating a thriving working environment. with this, we remain committed to providing equal opportunities regardless of race, gender or religious background. As of december 2013, we have more than 900 employees, out of which 77% are Malays, 16% are Chinese, 5% are indians and 2% are from other ethnic groups. 34% of our employees are female.

Apart from workplace diversity, we also provide both defined contribution and benefits plans. defined contributions plan are epf contributions for all employees and defined benefit plans are retirement plans that apply to 18% of permanent employees. in 2013, the provision for this retirement plan amounted to rM700,000. other fringe benefits include health, accident and life insurance; medical, dental and maternity

expenses;aswellascarandhousingloaninterestsubsidies. on top of this, deserving employees are regularly given due recognition through various ways such as Appreciation lunches and Merit Awards. A total of 0.3% of staff cost was spent for employee recognition programmes.

ENHANciNg cUSTOmER EXPERiENcEwe have made it our mission to help customers succeed. our Customer service improvement (csi)executiveworkswithvariousinternalgroupsand customers to ensure prompt resolution of issues as well as facilitates the changes needed to improve our customer satisfaction level. we regularly measure customer satisfaction and loyalty through a variety of surveys and measurements. our annual Mesiniaga experiencesurveyhelpsprovidean insight intohow customers view us. for 2013, we received a score of 63%. we will continue to provide value driven solutions that address customer business needs as we believe this strategy will improve our overall score and ultimately, is the key to helping us achieve sustainable competitive advantage.

showing appreciation towards outstanding employees with a lunch treat


cARiNg fOR THE cOmmUNiTywe maintain our objective to help address graduate unemployment in Malaysia. our successful Mesiniaga Academy programme is currently in its seventh year. As of december 2013,94 students from various polytechnic Colleges around Malaysia have been part of this programme, the majority of whom have graduated and found employment. this is a testament to the programme’s effectiveness in equipping the students with marketable and relevantworkexperiences.

last year, we gave our support to the pantai timur flood donation drive. we also helped the less fortunate by feeding the homeless in Jalan Melaka, Kuala lumpur. in addition to that, we played host to orphans from rumah

Amal siraman Kasih, rawang during our Majlis berbuka puasa event last year.

our dedication in helping the poor families in Kampung trong, perak continues. we brought cheer to kindergarten children in Kampung trong when their school was transformed with a new coat of paint, and equipped with furniture, toys and other necessities. we continue to donate food and other essentials to the poor families there.

Apart from our other various ad-hoc contributions to the community, we also continue our commitment to p. s. the Children, an nGo that educates adults and children on the prevention of childsexualabuse.


orphans from rumah Amal siraman Kasih during our Majlis berbuka puasa event


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cARiNg fOR THE ENViRONmENTon 29 March 2014, we supported the global earth Hourmovementforthesixthtimebyswitchingthelights off for one hour. our office buildings, Menara Mesiniaga and Mutiara Mesiniaga are renowned for their green features as both buildings are bioclimatic in design so as to minimise their impact on the environment. Additionally, we continue to practise other green initiatives, especially with regards to our internal it systems. recently, we improved our energy efficiency by adopting cloud-based solutions.

we believe that it can further improve living standards and pave the way for sustainable living. As such, we remain committed and continue our collaboration with property developers to build sustainable cities.

we have also embraced other green concepts which included the virtualisation of our servers and switching to energy efficient light bulbs, further displaying our commitment in reducing energy consumption.

we continue our practice of recycling items such as non-confidential documents, newspapers, peripherals, cardboards and unused or old computer equipment.



ensurinG operAtionAl

EXcELLENcE Constantly improving efficiency in all operational aspects



boArd ofdiREcTORS

dATUK WAN mOHAmEd fUSiL, dMsM, 63cHAirMAnAnDexecutiVeDirectOr

datuk wan Mohamed fusil was appointed to the board on 17 december 1981 as part of the team who founded the company. He was elected Chairman of the board on 14 June 2007. DatukWan Fusil was the chief executive Officer ofMesiniaga until 31 december 2007. prior to joining Mesiniaga, datuk wan fusil was with ibM Malaysia. during his tenure with ibM Malaysia, he served in various managerial positions. this included serving as Country Manager - information products division. datuk wan fusil is one of the first serving board Members of Multimedia development Corporation (MdeC) and is also one of the founding members of the Association of Computer and Multimedia industry Malaysia (piKoM). He has held several positions in piKoM including serving as Councillor (1987), deputy Chairman (1989-1991) and Chairman (1991/92). datuk wan fusil graduated with a diploma in Accountancy from itM (now known as uitM).

Mohamed fitri Abdullah was appointed to the board on 1 January 2014 when he joined the company as Managing Director. He has over 25 years of experience in the ictindustry in both local and international settings. within the past 12 years of his career, he held various senior leadership positionsinseveralcompaniessuchasMaxisBerhadandHewlett-packard. His last position before joining Mesiniaga was with Maxis as senior Vice President and Head ofMaxisBusinessserviceswherehewasresponsiblefortheCorporate, Government, sMe and wholesale business for Maxis.FitrihasaBachelorofsciencedegreeincomputerscience from indiana state university, a Master of science degree in Computer science from Arizona state university and attended the Advanced Management program from Harvard business school in 2011.

mOHAmEd fiTRi ABdULLAH, 50MAnAGinG direCtorfrom 1 January 2014


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mOHd PUzi AHAmAd, rA (M), fCCA, 61CHief finAnCiAl offiCer AnDexecutiVeDirectOr

Mohd puzi Ahamad was appointed to the board on 17 december 1981 as part of the team who founded the company. prior to joining the company, he served with ibM Malaysia in various capacities over a seven-year period from 1974-1981. His last position with ibM Malaysia was sales and Administration Manager. A trained accountant who graduated from itM (now known as uitM), Mohd puzi is a fellow Member of the Association of Chartered Certified Accountants (ACCA) and a member of the Malaysian institute of Accountants (MiA).

board of directors

VOON SENg cHUAN, 55inDePenDentnOn-executiVeDirectOr

Voon sengchuanwas appointed to the Board as a non-independent non-executive Director on 24 October 2000.on 1 April 2013, he was re-designated as an independent non-executiveDirector.since1983,Voonhas servedwithibM Malaysia in various capacities starting with his first appointment as Marketing representative. since then, he held several key local and regional positions such as Country brand Manager; General Manager for Channels Management, iBM AseAn/south Asia; and Vice Presidentfor business partners, sales and Marketing for ibM Asia pacific. in January 2000, he became Managing director of ibM Malaysia and brunei. After which, he was assigned to ibM Asia pacific headquarters to handle their headquarters organisation restructuring. His last role before retiring in 2010 was as director for Mid-Market and strategy for Asia pacific. Voon holds a Bachelor of science degree in Mathematicsfrom universiti Malaya.


Abdul talib bin baba was appointed to the board on 21 August 2007. Abdul talib is a fellow Member of the Association of Chartered Certified Accountants (ACCA) and is a registered member of Malaysian institute of Accountants (MiA). He started his career with the Ministry of defence in 1965 before joining the department of Civil Aviation (dCA) in 1973. Abdul talib left dCA to join petronas berhad as a senior internal Auditor in 1980 and subsequently served in petronas penapisan sdn. bhd. and petronas Mitco sdn. bhd. He retired from petronas in october 1999. Currently Abdul talib is also sitting on the board of pfCe berhad and emas Kiara industries berhad.

ABdUL TALiB BABA, rA (M), fCCA, 68inDePenDentnOn-executiVeDirectOr

board of directors

fATHiL iSmAiL, 50MAnAGinG direCtoruntil 31 december 2013

nOn-inDePenDentnOn-executiVeDirectOrfrom 1 January 2014

fathil ismail was appointed to the board on 1 June 2002. between 2008 and 2013, he helmed the company as Managing director. from 1 January 2014, he continues to sit ontheBoardasanon-independentnon-executiveDirector.Anaccountantbytraining,Fathilservedwithernst&Youngand subsequently with the Corporate finance department of Arab Malaysian Merchant bank before pursuing private enterprise. He was a founding partner and the Managing director of Genesis Healthcare (now known as inG employee Benefits) for six years until late 2001. Fathil is an alumnusof Malay College Kuala Kangsar and graduated from the Association of Chartered Certified Accountants (ACCA).


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WONg fOOK HON, 70inDePenDentnOn-executiVeDirectOr

wong fook Hoon was appointed to the board on 1 August 2008. wong started his career in ibM Malaysia as a systems engineer in 1970. throughout his 29-year career in ibM Malaysia,Wongalsoexpandedhisworkportfoliotoincludebecoming the director of Management services and director of Marketing. His last position in ibM Malaysia before retiring in 1999 was as the director of finance. wong holds a Masters in engineering in Aeronautics.

dATO’ AB RASHid mAT AdAm, diMp, 64inDePenDentnOn-executiVeDirectOr

dato’ Ab rashid Mat Adam was appointed to the board on 30 december 2008. dato’ Ab rashid began his career in 1974 as a principal Assistant director in the Malaysian public services department (psd). After a 10-year stint in psd, he served in various capacities in several government ministries and agencies such as the Malaysian Highway Authority, Ministry of finance and Ministry of national unity and social development. He was appointed as the deputy director General of the national Anti dadah Agency in 1996. His last posting before retiring was as the deputy secretary General 1 in the Ministry of Home Affairs. dato’ Ab rashid holds a bachelor of Arts in international relations from universiti Malaya and a Masters in public Administration from university of southern California.

board of directors


iR. dR. mUHAmAd fUAd ABdULLAH, 61nOn-inDePenDentnOn-executiVeDirectOr

ir. dr. Muhamad fuad Abdullah was appointed to the board on 16 July 2010. He began his career in 1977 as an electrical engineer in the Malaysian public works department. After spending six years in the technical area, he took on theposition of engineering logistics Manager in uniphone sdn. bhd. He then served as a tutor in universiti Kebangsaan Malaysia (uKM) in 1992 and thereafter became the Vicepresident in Kolej uniti in 1996. He was also the Managing director of five-H Associates sdn bhd. and Ceo of Kausar Corporation sdn bhd. He is now the owner of Muhamad fuad Consulting and a director in Midf berhad, Midf property berhad, institut Kefahaman islam Malaysia, sime darby berhad and sime darby property berhad. He is a fellow of the institution of engineers Malaysia and an Accredited Mediator for the Construction industry development board

All Board Members are Malaysian citizens. All Board Members have no other relationship among themselves or with any of the substantial shareholders of the Company except for Fathil Ismail who has a kin relationship with Safiah Sulaiman Ismail, a substantial shareholder of the Company. All Board Members do not have any conflict of interest with the Company as well as were never convicted of anything other than traffic offences within the past 10 years. Other than the Directorship positions held by Abdul Talib Baba and Ir. Dr. Muhamad Fuad Abdullah in other public companies as stated in their profiles, all of the Directors do not hold any directorship positions in any public companies other than Mesiniaga Berhad.

Details of the Directors’ membership in the Board Committees are listed in the Corporate Information on page 8.

(Cidb) Malaysia. ir. dr. Muhamad fuad holds a bachelor of science in electrical engineering and an M.phil in electrical engineering from university of southampton. He also holds a bachelor of Arts (Jayyid) in syariah from Jordan university and a ph.d in Muslim Civilisation from university of Aberdeen.

board of directors


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seniormANAgEmENT TEAm

2 3 4 6

8 9 10 11 12 13

1 5


1. dATUK WAN mOHAmEd fUSiL executiVecHAirMAn

refer to profile on board of directors page.

2. mOHAmEd fiTRi ABdULLAH MAnAGinG direCtor


3. mOHd PUzi AHAmAd, RA (m), fccA CHief finAnCiAl offiCer


4. gOH SEE WEE CHief operAtinG offiCer

Goh see wee joined the company in 2013 as the director of operations. He became the Chief operating officer in 2014. He is responsible for driving operational excellence and effectiveness for our delivery, implementation and supportdivisions.Hebringswithhimmanyyearsof ictmanagementand leadershipexperiencewithseveralmulti-nationalbanks. He was the global head of the development centre for standard Chartered bank in Malaysia before joining uob bank in singapore as the technology head for their wholesale bank, treasury, asset management and risk functions. He graduated with a diploma from the Malaysian institute of Management and holds an MbA from university of bath.

5. SUHAimi SULONg direCtor of HuMAn resourCes

suhaimi sulong joined the company in 2014 as director of Human resources. He brings with him over 15 years of experienceintheHrindustrywhichincludedsuccessfuldevelopmentandimplementationofstrategicHrprogrammesonbothlocalandinternationallevelsatMaxis,ProtonHoldingsBerhadandiBM.AstheHeadofgovernmentAffairsatMaxis,heledgovernmentengagementinitiativesinMaxis,whileatProton,heservedastheDirectorofgroupHumanresourcesand was responsible for driving the Human resource transformation framework which supported the company’s initiatives towards becoming the leading Asian automotive company. suhaimi graduated with a diploma in Mechanical engineering from itM (now known as uitM).

senior management team


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6. yEOW dAW SWEE direCtor of proCess And inforMAtion offiCe

yeow daw swee started his career with the company in 1982 as a product support representative. After spending five years in the technical support area, he was promoted to Advisory systems engineer in 1988. in 1989, he was promoted to technical support Manager and subsequently to Country support Manager in 1993. He was appointed General Manager for services in 1997, responsible for the technical support and services business unit. He was then appointed director of Marketing services on 1 october 2000 where he was responsible for the solution units that eventually evolved into the enterprise solutions division. through several subsequent organisational restructuring his portfolio included technology research and innovation; solutions, services and technology; and northern region sales. yeow is now the director of process and information office.

7. NORdiN mAT iSA direCtor of sAles, telCo And publiC seCtor business

nordin Mat isa joined the company in 2008 as Head of public sector business. within two years, he successfully led histeamtoexpandthescopeofpublicsectorsalesandincreaseitsrevenue.Hewassubsequentlyfurtherentrustedwith the infrastructure services sales portfolio and in december 2010, he became the director of sales for public sector and infrastructure business. prior to joining the company, he was the Head of public sector sales in Hewlett packard Malaysiasdn.Bhd.nordinhashad20yearsofexperience inthecorporateworldandgraduatedwithaBachelor inComputer science, Mathematics and statistics from Australian national university.

8. SAfARUddiN JAiS, cA (m), AcmA generAlMAnAger,FinAnceAnDcOrPOrAteserVices

safaruddin Jais has had a long-standing career with the company starting with his first job as Accounts Assistant trainee in 1985. within the space of ten years, he climbed up the ranks to become Accounting services Manager. After four years in this position, his scope of responsibility was increased and he was appointed as the General Manager for finance and Corporate services responsible for the organisation’s entire financial operations. He is an Associate Member of the Chartered institute of Management Accountant (CiMA) and a member of the Malaysian institute of Accountants (MiA). safaruddin graduated with a diploma in Accountancy from itM (now known as uitM).



9. PATRiciA cHAN GenerAl MAnAGer, ArCHiteCtinG

patricia has been with the company since 1989 when she first became a trainee programmer Analyst. After nine years of serving as a programmer analyst and subsequently a systems analyst, she took on the post of development services Manager in 1998. from then on, she has held various managerial positions including for sales support, implementation services, systems integration and solutions integration. in december 2010, she was promoted to General Manager in chargeofanextensiveportfoliocomprisingsolutionsintegration,internalsystemsandApplicationDevelopment.sheis now the General Manager for Architecting, taking on the responsibility of ensuring that the design and quality of our proposed solutions best fit customer business requirements. patricia graduated with a bachelor in Computer science from universiti sains Malaysia.

10. NUR HARyATi HiSHAm GenerAl MAnAGer, CustoMer enGAGeMent And retention business

nur Haryati first joined the company in 1997 as a Graduate trainee in the company’s entry level trainee (elt) program. After which, she served as an Application engineer for seven years. in 2004, she became one of the company’s youngest managers when she was promoted to information systems Manager. three years later, she took up a new challenge as the Human resource Manager responsible for aligning the company’s human capital requirements to its business strategy. in 2013, she was made the General Manager of Maintenance and Managed services responsible for managing customer support operations. starting January 2014, she became the General Manager of Customer engagement and retention business where she will be driving customer engagement and retention. nur Haryati graduated with a bachelor in business and Management studies from the university of salford and holds an MbA from universiti Malaya.

11. mASTURA mAJid GenerAl MAnAGer, proJeCt MAnAGeMent

Mastura Majid began her career in the company in 1985 as a systems engineer. After eight years of serving as a systems engineer and subsequently an office systems specialist, she took on the position of Customer support Manager in 1993. from then on, she held various managerial positions including for sAp technical team; sAp business unit; systems infrastructure Management solutions unit; strategic plan implementation; and project Management unit. in 2012, she was promoted to General Manager for project Management unit. she now heads the project Management division. Mastura graduated with a bachelor’s degree in Mathematical engineering from Aston university, birmingham.


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12. mOHd AzmAN md ARiS GenerAl MAnAGer, systeMs enGineerinG

Mohd Azman Md Aris joined the company in 2011 as the General Manager for service delivery operations, where he was responsible for driving productivity and efficiency of the post-sales teams. in January 2014, he became the generalManagerofsystemsengineeringandhisportfolioexpandedtoincludemanagementofpre-salesteams.Hispast employers included ericsson and dHl, where he worked as the Head of Corporate network and Head of telecom solution respectively. He graduated with a Master’s degree in Computer science from binghamton university, new york. He is also a Certified prinCe2 practitioner.

13. WAN yUSSmAN WAN yUSOf GenerAl MAnAGer, softwAre enGineerinG

wan yussman wan yusof joined the company in 2014 as the General Manager of software engineering. with over 15 yearsofexperienceintheitindustry,hespecialisesinleveragingtechnologyanddevelopingtalenttodriveorganisationalgrowthaswellastoexpandintellectualpropertycapital.Healsobringstothecompanyhisexperienceofworkingindiverseenvironmentsofstart-up,high-growthandoutsourcingcompanieswithexposureinlogistics,oilandgas,FMcgand ecommerce industries. yussman’s previous roles included senior director of software engineering for Monster technologies; and Global build Manager, Marketing it for british American tobacco. He graduated with a bachelor of science, information and decision systems from Carnegie Mellon university.


AwArds And PARTNERSHiP STATUS

WE REcEiVEd A NUmBER Of SigNificANT AWARdS ANd PARTNERSHiP STATUS THROUgHOUT 2013. THESE AccOLAdES REfLEcT OUR cREdiBLE BUSiNESS PERfORmANcE ANd LOyALTy TO OUR BUSiNESS PARTNERS.

1. AvnetcommVaultrisingstarAward20132. symantec fy13 top performance partner (enterprise) Award3. Hp Million dollar Award 2013 4. iBMAuthorisedsoftwareValuePlusPartner20145. ibM top performer for rational ibM software Group 20136. i-sprint preferred partner 2013/20147. AcAPacifictopAchieverenterprisesecurity&networkingsolutions2013

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the board, in its pursuit of discharging their roles and responsibilities to protect and enhance shareholder value and the financial performance of the Company, recognises, and commits to adhering to, the requirements and guidelines of the Malaysian Code oncorporategovernance2012(“thecode”).

the board of directors is of the view that it has satisfied the major recommendations in the Code. A key outstanding recommendation is with regards to recommendation 3.5, which requires the board to comprise a majority of independent directors where the chairman of the board is not an independent director.

Another outstanding recommendation is pertaining to recommendation 1.7 on the disclosure of its board Charter to the public. the board Charter incorporating all relevant provisions derived from its Articles of Association; Main Market listing requirements; Malaysian Code on Corporate Governance 2012; Corporate Governance Guide; and Code of ethics for directors as issued by the Companies Commission is currently being formalised and should be made available to the public by mid-year 2014.

the company will continue to strengthen its governance practices to safeguard the best interest of its shareholders and other stakeholders.

the following is a summary of the Company’s practice of the Code on Corporate Governance:

THE BOARd Of diREcTORS

the board is entrusted with leading and overseeing the business of the Group. the board is responsible for the Group’s progress and for ensuring that the Group is well managed. it also sets the group’s strategic direction and objectives. the board is also responsible for approving performance targets, monitoring the Management’s achievements, providing overall policy guidance and ensuring that policies and procedures for internal control systems are in place.

throughout 2013, the board of directors met four times. details of the meetings are as follows:

9 APR 2013 19 JUN 2013 10 OcT 2013 5 dEc 2013

dAtuK wAn MoHAMed fusil wAn MAHMood y y y y

MoHd puZi AHAMAd y y y y

VOOnsengcHuAn Y Y Y Y

fAtHil sulAiMAn isMAil y y y y

Abd tAlib bAbA y y y y

wonG fooK Hon y y y y

dAto’ Ab rAsHid MAt AdAM y y y y

ir. dr. MuHAMAd fuAd AbdullAH y y y X

Key: y - Attended X - Absent with Aplogies

All meetings were held at the Conference room, 11th floor, Menara Mesiniaga, 1A, Jalan ss16/1, 47500 subang Jaya, selangor Darulehsan.theDirectorsexercisedindependentjudgementstobearonallissuespresentedattheDirectors’meetingswhichamong others incorporate issues on strategies, performance and resources.

stAteMent ofcORPORATE gOVERNANcE


Board BalanceFrom1April2013andthroughouttherestoftheyearin2013,theBoardconsistsofthree(3)executiveDirectorsandfive(5)non-executiveDirectors;four(4)ofwhomareindependentnon-executiveDirectors.

the representation of the members of the board is as follows:

%

executiveDirectors 3 37.5

non-independentnon-executiveDirectors 1 12.5

independentnon-executiveDirectors 4 50.0

the composition, though compliant with the listing requirements of bursa securities, which requires that at least one third of

the board should comprise independent directors, does not satisfy recommendation 3.5 of the Code which stipulates that the

board must comprise a majority of independent directors where the chairman of the board is not an independent director. the

independentnon-executiveDirectorsasagrouphoweverformsthelargestgroupofdirectorsontheBoard.

theexistingDirectorsbringawiderangeofbusiness,commercialandfinancialexperiencerelevanttothecompany.Abrief

description on the background of each director is presented in the directors profile column on pages 38 t0 42.

Supply of informationthe board is provided with written reports and supporting information ahead of meetings of the board and in sufficient time to

enabletheDirectorstoobtainfurtherexplanations,wherenecessary,inordertobesufficientlywell-informedbeforethemeeting.

At each directors meeting, a special briefing on the Company’s operations by the Company’s senior managers was also

presented. the special briefings by the senior managers were to allow the directors to actively and effectively participate in

determining the Company’s direction.

All directors have access to the service of the Company secretary and if so required, could also engage independent professional

adviceatthecompany’sexpense.

Re-electionin accordance with the Company’s Articles of Association, all directors are to retire from office at least once every three years but shall be eligible for re-elections.

directors’ TrainingAll board members have attended the Mandatory Accreditation programme (MAp) orgnanised by bursa securities. in addition, board members have also attended various training programmes which the board believes have aided them in discharging their duties as directors of the Company.

statement of corporate governance


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cOmmiTmENT Of diREcTORS

All board members commit to attend all board meetings. this was evidenced by the full attendance of all board members

atBoardmeetingsheldinyear2013,withtheexceptionofameetingheldon5DecemberwhenaDirectorwasabsentwith

apologies.

diREcTORS’ REmUNERATiON

theexecutiveDirectorsremunerationisdeterminedbytheremunerationcommittee,whichisheadedbyVoonsengchuan.considerations such as Director’s responsibilities, experience and market rates are taken into account when decidingremuneration.

details of the remuneration for the directors are as follows:

benefits

basic salary fees bonus -in-kind pension others total

rM rM rM rM rM rM rM

executiveDirectors 1,430,120 0 24,300 0 157,436 281,257 1,893,113

non-executiveDirectors 0 211,000 0 0 0 28,000 239,000

directors’ remuneration in bands

no.ofexecutiveDirectors no.ofnon-executiveDirectors

below rM50,000 0 3

below rM100,00 0 2

rM500,000 to rM550,000 1 0

rM600,000 to rM650,000 1 0

rM700,000 to rM750,000 1 0

BOARd cOmmiTTEES

the main board has delegated specific responsibilities to board committees which operate within clearly-defined terms of reference.thecommitteesareempoweredtodeliberateandexamineissuesdelegatedtothemandreportbacktotheBoardwith their recommendation and comments.

the various board Committees and their composition are as listed on page 8. the chairmanship of the various board committees is in compliance with the Code.



SHAREHOLdERS

dialogue between the company and investorsthe Managing director provides updates on Company performance to analysts from time to time, especially after the announcement of the Company’s quarterly financial results. the Company’s web site www.mesiniaga.com.my is also accessible for further information.

The Annual general meetingAt each Annual General Meeting, the board presents the progress and performance of the business and encourages shareholders to participate in the question and answer session. All directors attend the Annual General Meeting.

Anexplanatory statement for theproposed resolution, to facilitate full understandingandevaluationof issues involved,willaccompany each item of special business included in the notice of the meeting.

AccOUNTABiLiTy ANd AUdiT

financial Reportingin presenting the annual financial statements and quarterly announcements to shareholders, the directors aim to present a balanced and easily understandable assessment of the Company’s position and prospects. the Audit and risk Management Committee assists the board in ensuring accuracy and adequacy of information by reviewing the information for disclosure.

the statement of directors responsibility pursuant to section 169 of the Companies Act, 1965 is set out on page 53 of this Annual report. the signed statement by Mohamed fitri Abdullah and Mohd puzi Ahamad is duly incorporated into the Company’s audited financial statements for the year ending on 31 december 2013 as set out on page 65 of this Annual report.

internal controlthe directors acknowledge their responsibility for the Company’s system of internal controls which covers financial, operational and compliance controls, as well as risk management. the internal control system is designed and maintained to ensure that the risks faced by the business in pursuit of its objectives are identified and managed at known acceptable levels.

the internal Audit department undertakes the internal audit functions in the Company while the Audit and risk Management Committee coordinates the implementation of a group-wide risk management programme. the Company will continually review theadequacyandintegrityofitssystemofinternalcontrol.Amongothers,inputandrecommendationsfromtheexternalauditorswould form as basis for any improvement to be made on its adequacy and integrity of its system of internal control.

RELATiONSHiP WiTH AUdiTORS

the role of the Audit and risk Management committee is as stated on pages 56 to 58. through the Audit and risk Management committee of the board, the Company has established transparent and appropriate relationships with the Company’s auditors, bothinternalandexternal.Whenrequired,theexternalauditorsattendthemeetingsofthecommittee.


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the directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which gives a true and fair view of the state of affairs of the Company as at the end of the financial year, and the statement of comprehensive income and cash flow of the Company for the financial year.

in preparing the financial statements of the Company for the year ended 31 december 2013, the directors have ensured that the Company has adopted appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates. the directors have also considered that all applicable accounting standards have been followed and confirmed that the financial statements have been prepared on the going concern basis as the directors have a reasonable expectation, havingmade enquiries, that thegroup and thecompany have adequate resources to continue in operationalexistencefortheforeseeablefuture.

the directors have the responsibility to ensure that the Company maintains adequate accounting records which disclose with reasonable accuracy the financial position of the Company to enable them to ensure that the financial statements comply with the requirements of the Companies Act, 1965.

the directors are responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company.

stAteMent of direCtors’ RESPONSiBiLiTy iN RELATiON TO fiNANciAL STATEmENTS


the board has overall responsibility for the Company’s system of internal control, which includes the establishment of an appropriate risk management system and internal control framework, involving financial, organisational and operational aspects of the Company.

the board recognises that in pursuing business objectives, internal controls can only provide reasonable but not absolute assurance against the risk of material errors, losses, fraud or occurrences of unforeseeable circumstances. the Company’s system of internal controls has been designed to place greater emphasis on the control of items of material significance in order to provide reasonable assurance that the major effects of these risks are minimised.

the Company’s internal control system encompasses the policies, procedures, processes, tasks and other aspects of the company and is reflected in the control environment which encompasses the organisation structure, governance activities including policies, procedures and the code of conduct. while risk management is a proactive on-going process involving identification,assessment,control,monitoringandreportingofriskexposures.theexistenceofanAuditandriskManagementdepartment provides the board with assurance regarding the adequacy and integrity of internal controls within the Company.

A risk Management Committee was established on 15 August 2011. its function was to coordinate the implementation of a risk management programme for the Group and to formalise the identification of principal risks affecting the achievement of the Group’s business objectives. it allows for a more structured and focused approach in managing the Group’s significant business risks.

risk management is an on-going process to ensure a more coordinated and consistent approach in managing the Group’s risk exposures.theriskmanagementprogrammewouldbesubjected for reviewby theAuditandriskManagementcommittee(ArMC) for and on behalf of the board. on 5 december 2013 the ArMC had presented to the board, the Company’s risk profile as at 30 september 2013 for the board’s attention.

Additionally and separately, the Audit and risk Management department performs on-going reviews of processes and activities within the Company in accordance to an internal audit plan. this audit plan was approved by the ArMC on the 22 november 2012andwasbasedontheareasofsignificantriskexposuretothecompany.theinternalauditreportsprovideindependentassurance and assessment on the effectiveness and soundness of internal controls mechanisms and ensure that they are in place. All findings are reported to the ArMC and recommended actions are placed upon the respective management for implementation. such process had been in place for the financial year ended 31 december 2013 and it is an on-going process for the Company.

As assured by the Managing director and the Chief financial officer during the ArMC meeting and board meeting dated 31st March 2014, based on the risk management and internal control system adopted by the Company, the board is of the view that the established policies and procedures are adequate and effective. the board remains committed in ensuring a sound system of risk management and internal control and therefore recognises that the systems must continuously evolve to support growth and will take any appropriate action plans, when necessary, to further enhance the Company’s system of risk management and internal control.

stAteMent on RiSK mANAgEmENT ANd iNTERNAL cONTROL


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the Company strives to ensure that proper processes are in place and will further enhance these practices based on the recommendations of Malaysian Code on Corporate Governance and the Guidelines for directors of listed issuers to comply withthestatementonriskManagementandinternalcontrols(“guidelines”).inviewoftheguidelines,theBoardperformedreviews on the current systems within the Company, including the assurance process to strengthen the internal controls and risk management in the Company.

BOARd Of diREcTORSmESiNiAgA BERHAd

statement on risk management and internal control


cHAiRPERSON

ABd TALiB BABAIndependent Non-Executive Director

mEmBERS

WONg fOOK HONIndependent Non-Executive Director

dATO’ AB RASHid mAT AdAmIndependent Non-Executive Director

SEcRETARy

SyEd JAmALLUdiN SyEd OSmAN JAmALLULAiLAudit & Risk ManagerHead of Audit & Risk Department

TERmS Of REfERENcE fOR THE AUdiT ANd RiSK mANAgEmENT cOmmiTTEE

Size and compositionthe Committee shall be appointed by the board of directors of Mesiniaga from amongst their members and shall consist of not less than three members, the majority of whom shall be independent directors.

At least one member of the Committee:

a. must be a member of the Malaysian institute of Accountants; or

b. if he/she is not a member of the Malaysian institute of Accountants, he/she must have at least three years’ working experienceand;

c. he/shemusthavepassedtheexaminationsspecifiedinPartiofthe1stscheduleoftheAccountantsAct1967;or

d. he/she must be a member of one of the associations of accountants specified in part ii of the 1st schedule of the Accountants Act 1967; or

e. fulfils such requirements as prescribed by bursa securities.

the Chairperson of the Committee shall be an independent director.

Audit And risK mANAgEmENT cOmmiTTEE


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audit and risk management committee

frequency of meetingsMeetings shall be held not less than four times a year and as and when required during the financial year. the quorum for a meeting shall be at least two directors.

Secretarythe secretary of the Audit and risk Management committee shall be the Head of Audit and risk department of the Company. Minutes of meetings shall be recorded.

Purpose of the committeethe primary objective of the Audit and risk Management committee is to assist the board in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting, risk management and internal control.

functions and dutiesthe functions and duties of the Audit and risk Management Committee are:1. toconsidertheappointmentoftheexternalauditor,theauditfeeandanyquestionsoftheirresignationordismissal.2. to review the scope, functions and resources of the internal audit and risk management functions.3. to review the internal audit programme and monitor its implementation.4. to review the internal audit reports and follow-up on the action taken to implement the recommendations of the internal auditor.5. to review the year-end financial statements, prior to the approval by the board of directors.6. to review and approve the release of the quarterly results.7. to review the related party transactions and conflict of interest situations within the company or group.8. to review risk management reports.9. to perform other related duties as directed by the board of directors.

meetings Held

27 fEB 2013 9 APR 2013 29 mAy 2013 5 AUg 2013 21 NOV 2013

Abd tAlib bAbA y y y y y

wonG fooK Hon y y y y y

dAto Ab rAsHidMAt AdAM y y y y y

Key: y - Attended


Summary of Activities1. review and approve financial results announcement to bursa securities.2. review and adopt quarterly financial results.3. review yearly financial statements and recommend to the board of directors for adoption of yearly financial

results.4. review related party transactions.5. review internal audit plan, functions and resources.6. review internal audit reports and risk management reports7. participate in training programmes in related areas.8. reviewwiththeexternalauditor,theauditplan,evaluationofthesystemofinternalcontrols,auditreportand

assistance given by the company’s officers to the auditors.9. Attendindependentmeetingswithexternalauditor.

Summary of Audit and Risk management functions:1. prepare annual audit plan.2. perform field audit and assessment to comply with policies and procedures, and operating effectiveness and

controls.3. present reports on audits assignment.4. present reports on risk profile status and movements.5. Maintain effective audit programmes.6. Maintain up-to-date Company’s risk profile.7. follow-up on mitigation controls for all risks8. prepare Audit and risk Management Committee (ArMC) meeting minutes for review.9. perform secretarial functions to the ArMC.10. plan and coordinatie iso Quality audit 11. Providefullcooperationtotheexternalauditorsincarryingouttheiraudit.12. perform any other functions as instructed by the ArMC and the board of directors.

audit and risk management committee


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UTiLiSATiON Of PROcEEdS

no funds were raised by the Company from any corporate proposal during the financial year.

SHARE BUyBAcK

during the financial year, the Company did not enter into any share buy back transactions.

OPTiONS, WARRANTS OR cONVERTiBLE SEcURiTiES

therewerenooptions issuedandexercised throughout theyear 2012 and the Company did not implement any other options, warrants or convertible securities.

AmERicAN dEPOSiTORy REcEiPT (AdR) / gLOBAL dEPOSiTORy REcEiPT (gdR)

during the financial year, the Company did not enter into any Adr/Gdr transactions.

SANcTiONS ANd/OR PENALTiES

there were no sanctions or penalties imposed on the Company and its subsidiaries, directors or Management by the relevant regulatory bodies during the financial year.

NON-AUdiT fEES

AnamountofrM58,000waspaidfortaxservicesprovidedby

Pwctaxationservicessdn.Bhd.

otHer inforMAtion reQuired By THE LiSTiNg REQUiREmENT Of BURSA SEcURiTiES

VARiATiON iN RESULTS

there was no significant difference between the audited and unaudited results.

PROfiT gUARANTEE

the Company has never provided any profit guarantee.

mATERiAL cONTRAcTS

there were no material contracts by the Company and its subsidiaries involving directors or substantial shareholders’ interest during the financial year.

cONTRAcTS RELATiNg TO LOAN

there were no contracts relating to a loan by the Company during the financial year.

cONfLicT Of iNTEREST

unless otherwise disclosed, the directors were not aware of any conflict of interest among the directors with the Company, existingattheendofthefinancialyear2012.

EmPLOyEE SHARE OPTiON ScHEmE

the Company did not implement any employee share options scheme in the financial year 2013.

061 Directors’ Report065 Statement by Directors066 Statutory Declaration067 Independent Auditors’ Report069 Statements of Comprehensive Income070 Statements of Financial Position071 Consolidated Statement of Changes in Equity072 Company Statement of Changes in Equity073 Statements of Cash Flows075 Notes to the Financial Statements128 Supplementary Information


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The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2013.

PRINCIPAL ACTIVITIES

The Company is principally involved in the sale of information technology products and related services. The principal activities of the subsidiaries are described in Note 15 to the financial statements.

There have been no significant changes in the principal activities of the Group and the Company during the financial year.

FINANCIAL RESULTS

Group Company RM’000 RM’000

Loss for the year attributable to: Equity holders of the Company 7,644 4,730 Non-controlling interests (1,659) 0

Loss for the financial year 5,985 4,730

DIVIDENDS

The dividends on ordinary shares declared and paid by the Company since 31 December 2012 are as follows:

RM’000

In respect of the financial year ended 31 December 2012 as shown in the Directors’ report of that financial year:- final gross dividend of 21sen per share, less income tax of 25%, paid on 5 July 2013 9,513

The Directors now recommend the payment of a single tier dividend of 10sen per share of RM1.00 each, amounting to RM6,040,200 subject to the approval of the members at the forthcoming Annual General Meeting

RESERVES AND PROVISIONS

All material transfers to or from reserves and provisions during the financial year are shown in the financial statements.

DIRECTORS’REPORT


directors’ report

DIRECTORS

The Directors who have held office during the period since the date of the last report are as follows:

Mohamed Fitri Abdullah (Appointed 1 January 2014)Datuk Wan Mohamed Fusil bin Wan MahmoodMohd Puzi bin AhamadVoon Seng ChuanFathil Sulaiman IsmailAbdul Talib BabaWong Fook HonDato’ Ab Rashid bin Mat AdamIr. Dr. Muhamad Fuad bin Abdullah

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being an arrangement with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than the Directors’ remuneration disclosed in Note 6 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

DIRECTORS’ INTERESTS IN SHARES

According to the Register of Directors’ Shareholdings, particulars of interests of Directors who held office at the end of the financial year in shares in the Company are as follows:

Number of ordinary shares of RM1.00 each At At 01.01.2013 Bought Sold 31.12.2013 ‘000 ‘000 ‘000 ‘000

Datuk Wan Mohamed Fusil bin Wan Mahmood(1) 3,726 0 0 3,726Mohd Puzi bin Ahamad(2) 3,919 0 0 3,919Fathil Sulaiman Ismail 6,598 0 200 6,398Wong Fook Hon 1 0 0 1Voon Seng Chuan 260 0 0 260

(1) Including interests held under nominee accounts with CIMB Trustee Berhad, Citicorp Nominees (Tempatan) Sdn. Bhd., Alliancegroup Nominees (Tempatan) Sdn. Bhd. and Cimsec Nominees (Tempatan) Sdn. Bhd.

(2) Including interests held under nominee accounts with CIMB Trustee Berhad and Citicorp Nominees (Tempatan) Sdn. Bhd.


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DIRECTORS’ INTERESTS IN SHARES (CONTINUED)

Other than those disclosed above, according to the Register of Directors’ Shareholdings, none of the other Directors in office at the end of the financial year held any interest in shares, options over shares and debentures of the Company and its related corporations during the financial year.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Group and the Company had been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group or the Company misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and the Company to meet their obligations as and when they fall due.

At the date of this report, there does not exist:

(a) any charge on the assets of the Group and the Company which has arisen since the end of the financial year which secures the liability of any other person; or

(b) any contingent liability of the Group and the Company which has arisen since the end of the financial year.

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading.

directors’ report


STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED)

In the opinion of the Directors:

(a) the results of the Group’s and the Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group or the Company for the financial year in which this report is made.

AUDITORS

The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with their resolution dated 31 March 2014.

MOHAMED FITRI ABDULLAH MOHD PUZI BIN AHAMADDIRECTOR DIRECTOR

directors’ report


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We, Mohamed Fitri Abdullah and Mohd Puzi bin Ahamad, two of the Directors of Mesiniaga Berhad, state that, in the opinion of the Directors, the financial statements on pages 69 to 127 are drawn up so as to give a true and fair view of the financial position of the Group and the Company as at 31 December 2013 and of their financial performance and the cash flows of the Group and the Company for the financial year ended on that date in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.

The supplementary information set out in Note 32 on page 128 have been prepared in accordance with the Guidance of Special Matter No.1, Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board of Directors in accordance with their resolution dated 31 March 2014.

MOHAMED FITRI ABDULLAH MOHD PUZI BIN AHAMADDIRECTOR DIRECTOR

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965


I, Mohd Puzi bin Ahamad, the Director primarily responsible for the financial management of Mesiniaga Berhad, do solemnly and sincerely declare that the financial statements set out on pages 69 to 127 are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

MOHD PUZI BIN AHAMADDIRECTOR

Subscribed and solemnly declared by the abovenamed, Mohd Puzi bin Ahamad, at Subang Jaya in Malaysia on 31 March 2014 before me.

COMMISSIONER FOR OATHS

STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965


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REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Mesiniaga Berhad, on pages 69 to 127, which comprise the statements of financial position as at 31 December 2013 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on Notes 1 to 31.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and cash flows of the Group and of the Company for the financial year then ended.

PricewaterhouseCoopers (AF 1146), Chartered Accountants, Level 10, 1 Sentral, Jalan Travers, Kuala Lumpur Sentral, P.O. Box 10192, 50706 Kuala Lumpur, MalaysiaT: +60 (3) 2173 1188, F: +60 (3) 2173 1288, www.pwc.com/my

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF MESINIAGA BERHAD (Incorporated In Malaysia)


REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

OTHER REPORTING RESPONSIBILITIES

The supplementary information on Note 32 to the financial statements on page 128 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

PRICEWATERHOUSECOOPERS IRVIN GEORGE LUIS MENEZES (No. AF: 1146) (No. 2932/06/14 (J))Chartered Accountants Chartered Accountant

Kuala Lumpur31 March 2014

independent auditor’s report to the members of mesiniaga (incorporated in malaysia)


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Group Company

2013 2012 2013 2012 Note RM’000 RM’000 RM’000 RM’000

Revenue 5 281,007 326,350 262,268 307,178Changes in inventories of finished goods 9,788 (10,426) 7,575 (5,315)Finished goods purchased (166,502) (148,718) (134,400) (146,536)IT services purchased (26,524) (43,548) (100,316) (96,364)Staff cost 6 (79,838) (83,777) (42,027) (48,699)Depreciation and amortisation (7,381) (6,816) (2,288) (2,413)Travelling expenses (3,706) (5,146) (601) (986)Office administrative expenses (6,913) (7,719) (6,299) (6,409)Other operating expenses (2,315) (4,787) (7,252) (4,045)Other operating income 770 1,253 18,951 15,947

(Loss)/profit from operations 7 (1,614) 16,666 (4,389) 12,358Finance cost 8 (1,216) (1,060) (1,216) (1,060)

(Loss)/profit before taxation (2,830) 15,606 (5,605) 11,298Taxation and Zakat 9 (3,155) (4,167) 875 (751)

(Loss)/profit for the financial year (5,985) 11,439 (4,730) 10,547Item not reclassified to profit and lossActuarial gain on defined benefit plan 415 0 415 0

Total comprehensive (loss)/income for the financial year (5,570) 11,439 (4,315) 10,547

(Loss)/profit for the financial year attributable to:Equity holder of the Company (7,644) 9,738 (4,730) 10,547Non-controlling interests 1,659 1,701 0 0

(Loss)/profit for the financial year (5,985) 11,439 (4,730) 10,547

Total comprehensive (loss)/income for the financial year attributable to: Equity holders of the Company (7,229) 9,738 (4,315) 10,547Non-controlling interests 1,659 1,701 0 0

Total comprehensive (loss)/income for the financial year (5,570) 11,439 (4,315) 10,547 (Loss)/earnings per share (sen) 10 (12.66) 16.12

STATEMENTS OFCOMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013


Group Company

2013 2012 2013 2012 (restated) (restated) Note RM’000 RM’000 RM’000 RM’000

ASSETS Non-current assetsProperty, plant and equipment 12 62,595 66,710 53,609 54,456Intangible assets 13 1,217 0 0 0Investment property 14 1,394 1,418 1,394 1,418Investment in subsidiaries 15 0 0 1,985 1,235Finance lease receivables 19 612 1,141 612 1,141Deferred tax assets 16 1,781 360 1,458 0

67,599 69,629 59,058 58,250

Current assets Inventories 17 15,814 25,602 2,112 9,687Trade and other receivables 18 121,914 218,889 134,422 222,266Tax recoverable 517 4,319 490 4,319Deposits with licensed financial institutions 20 24,947 6,191 16,603 103Cash and bank balances 20 6,109 5,323 1,638 2,851

169,301 260,324 155,265 239,226

TOTAL ASSETS 236,900 329,953 214,323 297,476 EQUITY AND LIABILITIES Equity attributable to equity holders of the company Share capital 25 60,402 60,402 60,402 60,402Share premium 27 4,126 4,126 4,126 4,126Retained earnings 26 102,000 118,742 77,976 91,804

166,528 183,270 142,504 156,332Non-controlling interests 10,697 10,030 0 0

TOTAL EQUITY 177,225 193,300 142,504 156,332 Non-current liabilities Post-employment benefitsObligations 23 2,871 3,426 2,871 3,426Finance lease liabilities 24 571 4,586 571 4,586Deferred tax liabilities 16 1,846 3,027 0 282

5,288 11,039 3,442 8,294 Current liabilities Trade and other payables 21 39,760 71,122 55,737 79,534Borrowings 22 12,640 52,903 12,640 52,903Taxation 1,987 1,589 0 413

54,387 125,614 68,377 132,850

59,675 136,653 71,819 141,144

TOTAL EQUITY AND LIABILITIES 236,900 329,953 214,323 297,476

STATEMENTS OFFINANCIAL POSITIONAS AT 31 DECEMBER 2013


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CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013

Issued and fully paid ordinary shares of RM1.00 each Distributable Share Non- Number of Nominal premium Retained controlling shares value (Note 26) earnings Total interests TotalGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2012 - as previously stated 60,402 60,402 4,126 119,837 184,365 9,247 193,612Effect of adoption of MFRS 119 30 0 0 0 (1,320) (1,320) 0 (1,320)

At 1 January 2012 - as restated 60,402 60,402 4,126 118,517 183,045 9,247 192,292Transactions with owners: Final dividends: - 31 December 2011 11 0 0 0 (9,513) (9,513) (918) (10,431)

60,402 60,402 4,126 109,004 173,532 8,329 181,861Total comprehensive income for the financial year 0 0 0 9,738 9,738 1,701 11,439

At 31 December 2012 60,402 60,402 4,126 118,742 183,270 10,030 193,300 At 1 January 2013 - as previously stated 60,402 60,402 4,126 120,062 184,590 10,030 194,620Effect of adoption of MFRS 119 30 0 0 0 (1,320) (1,320) 0 (1,320)

At 1 January 2013 – as restated 60,402 60,402 4,126 118,742 183,270 10,030 193,300Transactions with owners: Final dividends: - 31 December 2012 11 0 0 0 (9,513) (9,513) (992) (10,505)

60,402 60,402 4,126 109,229 173,757 9,038 182,795Total comprehensive loss for the financial year 0 0 0 (7,644) (7,644) 1,659 (5,985)Items not reclassified to profit and loss Actuarial gain on defined benefit plan 0 0 0 415 415 0 415

At 31 December 2013 60,402 60,402 4,126 102,000 166,528 10,697 177,225


Issued and fully paid ordinary shares of RM1.00 each Distributable Share Number Nominal premium Retained of shares value (Note 26) earnings TotalCompany Note RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2012 - as previously stated 60,402 60,402 4,126 92,090 156,618Effect of adoption of MFRS 119 30 0 0 0 (1,320) (1,320)

At 1 January 2012 - as restated 60,402 60,402 4,126 90,770 155,298Transactions with owners: Final dividends: - 31 December 2011 11 0 0 0 (9,513) (9,513)

60,402 60,402 4,126 81,257 145,785Total comprehensive income for the financial year 0 0 0 10,547 10,547

At 31 December 2012 60,402 60,402 4,126 91,804 156,332 At 1 January 2013 – as previously stated 60,402 60,402 4,126 93,124 157,652Effect of adoption of MFRS 119 30 0 0 0 (1,320) (1,320)

At 1 January 2013 – as restated 60,402 60,402 4,126 91,804 156,332Transactions with owners: Final dividends: - 31 December 2012 11 0 0 0 (9,513) (9,513)

60,402 60,402 4,126 82,291 146,819Total comprehensive loss for the financial year 0 0 0 (4,730) (4,730)Items not reclassified to profit and loss Actuarial gain on defined benefit plan 0 0 0 415 415

At 31 December 2013 60,402 60,402 4,126 77,976 142,504

COMPANY STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013


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Group Company

Note 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit after taxation (5,985) 11,439 (4,730) 10,547

Adjustments for: Taxation 3,155 4,167 (875) 751 Amortisation of intangible assets 41 0 0 0 Depreciation: - property, plant and equipment 7,316 6,791 2,264 2,388 - investment property 24 25 24 25 Write-off of property, plant and equipment 14 0 6 0 Gross dividend income from subsidiaries 0 0 (14,033) (12,275) Interest expense 1,216 1,060 1,216 1,060 Interest income: - finance lease (102) (312) (102) (312) - others (482) (407) (241) (143)Retirement benefits 560 514 560 514 Write off of bad debts 224 2,323 224 2,323 Reversal of impairment of investment in subsidiaries 0 0 (750) 0 (Reversal)/impairment of amount due from subsidiaries 0 0 5,449 0 (Reversal)/impairment of receivables (341) 336 317 (281) Unrealised foreign exchange gain (116) (141) (116) (138)

5,524 25,795 (11,421) 5,021Changes in working capital: Inventories 9,788 (10,426) 7,575 (5,315) Subsidiaries 0 0 (9,246) 6,568 Receivables 97,441 (57,179) 91,149 (53,630) Payables (26,123) 7,667 (24,093) 3,678

Cash generated from/(used in) operations 86,630 (34,143) 53,964 (43,678)

Interest paid (1,216) (1,060) (1,216) (1,060)Retirement benefits paid (700) (350) (700) (350)Tax paid (4,483) (5,040) (402) (1,719)Tax refunded 3,106 1,586 3,019 0

Net cash generated from/(used in) operating activities 83,337 (39,007) 54,665 (46,807)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013


Group Company

Note 2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM INVESTING ACTIVITIES

Additions on intangible assets (1,005) 0 0 0Purchase of property, plant and equipment (3,468) (6,265) (1,430) (1,331)Interest received 584 371 343 107Net dividends received from subsidiaries 0 0 14,033 11,956Payments from/(advances to) subsidiaries 0 0 6,590 (8,634)

Net cash generated from/(used in) investing activities (3,889) (5,894) 19,536 2,098

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid to shareholders of the company (9,513) (9,513) (9,513) (9,513)Dividends paid to non-controlling interests (992) (918) 0 0Proceeds from finance lease liabilities 874 11,780 874 11,780Repayment of finance lease liabilities (10,012) (6,923) (10,012) (6,923)Drawdown of borrowings 0 114,389 0 114,389Repayment of borrowings (40,263) (71,406) (40,263) (71,406)

Net cash (used in)/generated from financing activities (59,906) 37,409 (58,914) 38,327

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL YEAR 19,542 (7,492) 15,287 (6,382)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL YEAR 11,514 19,006 2,954 9,336

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 20 31,056 11,514 18,241 2,954

statement of cash flows for the financial year ended 31 december 2013


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1 GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and the Company’s shares are publicly traded on the Main Market of Bursa Malaysia Securities Berhad.

The Company is principally involved in the sale of information technology products and related services. The principal activities of the subsidiaries are described in Note 15 to the financial statements. There have been no significant changes in the nature of the principal activities of the Group and the Company during the financial year.

The address of the registered office and the principal place of business of the Company is as follows:

11th Floor, Menara Mesiniaga,1A, Jalan SS16/1,47500 Subang Jaya.

These financial statements were authorised for issue by the Board of Directors in accordance with their resolution on 31 March 2014.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”),International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The financial statements have been prepared under the historical cost convention except as disclosed in the significant accounting policies below.

The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their judgment in the process of applying the Group’s and Company’s accounting policies. Although these estimates and judgment are based on the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

NOTES TO THEFINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013


notes to the financial statements for the financial year ended 31 December 2013

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.1 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)

(a) Standards, amendments to published standards and interpretations that are effective

The following standards have been adopted by the Group and Company for the first time for the financial year beginning on or after 1 January 2013 and have an impact on the Group and/or Company:

• amendment to MFrS 101 ‘presentation of items of other comprehensive income’ requires entities to separate items presented in ‘other comprehensive income’ (oCI) in the statement of comprehensive income into two groups, based on whether or not they may be recycled to profit or loss in the future.

• amendment to MFrS 119, ‘employee benefits’ which results in the following changes on the Group’s accounting policies:- to immediately recognise all past service cost in profit and loss- to recognise actuarial gains and losses in other comprehensive income in the period in which they

arise- to replace interest cost and expected return on plan assets with a net interest amount that is

calculated by applying the discount rate to the net defined benefit liability (asset)

Please refer to Note 30 for the effect to the financial statements.

(b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group but not yet effective

(i) Effective from financial year beginning on/after 1 January 2014

• the amendments to MFrS 136 ‘Impairment of assets’ removed certain disclosures of the recoverable amount of CGUs which had been included in MFRS 136 by the issuance of MFRS 13.

• amendment to MFrS 132, ‘Financial Instruments: presentation’ (effective from 1 January 2014) does not change the current offsetting model in MFrS 132. It clarifies the meaning of ‘currently has a legally enforceable right of set-off’ that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counter parties in the normal course of business. It clarifies that some gross settlement mechanisms with features that are effectively equivalent to net settlement will satisfy the MFRS 132 offsetting criteria.

• amendments to MFrS 10, MFrS 12 and MFrS 127 (effective from 1 January 2014) introduce an exception to consolidation for investment entities. Investment entities are entities whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both and evaluate the performance of its investments on fair value basis. The amendments require investment entities to measure particular subsidiaries at fair value instead of consolidating them.

• IC Interpretation 21, ‘levies’ (effective from 1 January 2014) sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation clarifies that a liability to pay a levy is recognised when the obligating event occurs. Obligating event is the event identified by the legislation that triggers the payment of the levy



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2.1 BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)

(b) Standards, amendments to published standards and interpretations to existing standards that are applicable to the Group but not yet effective (continued)

(ii) Effective date yet to be determined by Malaysian Accounting Standards Board

MFrS 9, ‘Financial Instruments - Classification and Measurement of Financial assets and Financial Liabilities’ replaces the parts of MFRS 139 that relate to the classification and measurement of financial instruments. MFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the MFRS 139 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group is yet to assess MFRS 9’s full impact. The Group will also consider the impact of the remaining phases of MFRS 9 when completed by the IASB Board.

The effects of the above standards are currently being assessed by the Directors.

2.2 CONSOLIDATION

(a) Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquire and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquire on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.




2.2 CONSOLIDATION (CONTINUED)

(a) Subsidiaries (continued)

Acquisition-related costs are expensed as incurred

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

The excess of the consideration transferred, the amount of any any-controlling interest in the acquire and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recognised as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries

When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.


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2.3 INVESTMENTS IN SUBSIDIARIES

In the Company’s separate financial statements, investments in subsidiaries are carried at cost less accumulated impairment losses. On disposal of investments in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

2.4 SEGMENTAL REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group’s Managing Director. Management has determined there is only one reportable segment based on the information reviewed by the Managing Director.

2.5 FOREIGN CURRENCIES

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). the financial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in other comprehensive income as qualifying cash flows hedges and qualifying net investment hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within ‘finance income or cost’. all other foreign exchange gains and losses are presented in profit or loss within ‘other (losses)/gains - net’.




2.5 FOREIGN CURRENCIES (CONTINUED)

(c) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statements of financial position presented are translated at the closing rate at the date of that statements of financial position;

• income and expenses for each statement of comprehensive income or separate income statement presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

• all resulting exchange differences are recognised as a separate component of other comprehensive income.

Goodwill and fair value adjustments arising on the acquisitions of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income.

On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of the exchange differences relating to that foreign operation recognised in other comprehensive income and accumulated in the separate component of equity are reclassified to profit or loss.

In the case of a partial disposal that does not result in the Group losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (that is, reductions in the Group’s ownership interest in associates or jointly controlled entities that do not result in the Group losing significant influence or joint control) the proportionate share of the accumulated exchange difference is reclassified to profit or loss.


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2.6 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset, if and only if, it is probable that future economic benefits associated with the item will flow to the Group and the Company and the cost of the item can be measured reliably.

Subsequent to initial recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group and the Company recognise such parts as individual assets with specific useful lives and depreciate them accordingly. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the profit and loss as incurred.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation on capital work-in-progress commences when the asset is ready for its intended use.

Depreciation of other property, plant and equipment is calculated on a straight-line basis to write off the cost of each asset to its residual value over their expected useful lives, at the following annual rates:

Building 2%Machines 14% - 33%Office equipment, furniture and fittings 7% - 33%Motor vehicle 25%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. See accounting policy on impairment of non-financial assets.

The residual values, useful lives and depreciation method are reviewed at each financial year-end and adjusted prospectively, if appropriate.

All items of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds if any, and the net carrying amount is recognised in the profit or loss.




2.7 INVESTMENT PROPERTY

Investment property is property which is held to earn rental yields or for capital appreciation or for both and is not occupied by the Group. Investment property also includes property that is being constructed or developed for future use as investment property.

Investment property is initially measured at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is provided for on a straight line basis over the estimated useful life. Leasehold land is amortised over its remaining lease period of 96 years. The principal annual rates used for building is 2% per annum.

Investment property is de-recognised when either it has been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the financial year of retirement or disposal.

Transfer is made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.6 up to the date of change in use.

2.8 INTANGIBLE ASSET

Research expenditure is recognised as an expense when incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria are fulfilled:

(i) it is technically feasible to complete the intangible asset so that it will be available for use or sale;(ii) management intends to complete the intangible asset and use or sell it;(iii) there is an ability to use or sell the intangible asset;(iv) it can be demonstrated how the intangible asset will generate probable future economic benefits;(v) adequate technical, financial and other resources to complete the development and to use or sell the intangible

asset are available; and(vi) the expenditure attributable to the intangible asset during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense when incurred. Development costs previously recognised as an expense are not recognised as an asset in subsequent period.

Capitalised development costs recognised as intangible assets are amortised from the point at which the asset is ready for use on a straight-line basis over its useful life, not exceeding four years.


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2.8 INTANGIBLE ASSET (CONTINUED)

Depreciation on capital work-in-progress commences when the asset is ready for its intended use.

Intangible asset is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds if any, and the net carrying amount is recognised in the profit or loss.

2.9 IMPAIRMENT OF NON-FINANCIAL ASSETS

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

The impairment loss or reversal is charged to the profit or loss in the financial year that the event occurs.

2.10 FINANCIAL ASSETS

(a) Classification

The Group classifies its financial assets in the following category: loans and receivables and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification at initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the statements of financial position.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.




2.10 FINANCIAL ASSETS (CONTINUED)

(b) Recognition and initial measurement

Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group commits to purchase or sell the asset.

Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in profit or loss.

(c) Subsequent measurement - Gains and losses

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Available-for-sale financial assets are subsequently carried at fair value. Changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income, except for impairment losses.

(d) Subsequent measurement - Impairment of financial assets

Assets carried at amortised cost

The Group assesses at the end of the reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a Group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or Group of financial assets that can be reliably estimated.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

• Significant financial difficulty of the issuer or obligor; or• a breach of contract, such as a default or delinquency in interest or principal payments; or• the Group, for economic or legal reasons relating to the borrower’s financial difficulty, granting to the

borrower a concession that the lender would not otherwise consider; or• It becomes probable that the borrower will enter bankruptcy or other financial reorganisation; or• Disappearance of an active market for that financial asset because of financial difficulties; or • observable data indicating that there is a measurable decrease in the estimated future cash flows from a

portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: (i) adverse changes in the payment status of borrowers in the portfolio; and(ii) national or local economic conditions that correlate with defaults on the assets in the portfolio.


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2.10 FINANCIAL ASSETS (CONTINUED)

(d) Subsequent measurement - Impairment of financial assets (continued)

Assets carried at amortised cost (continued)

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If ‘loans and receivables’ or a ‘held-to-maturity investment’ has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss.

When an asset is uncollectible, it is written off against the related allowance account. Such assets are written off after all the necessary procedures have been completed and the amount of the loss has been determined.

(e) De-recognition

Financial assets are de-recognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Receivables that are factored out to banks and other financial institutions with recourse to the Group are not de-recognised until the recourse period has expired and the risks and rewards of the receivables have been fully transferred. The corresponding cash received from the financial institutions is recorded as borrowings.

(f) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount presented in the statements of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

2.11 INVENTORIES

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average cost method. The cost of inventories includes purchase price and incidental charges. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses.




2.12 CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with banks, demand deposits, short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value and bank overdraft. In the statements of financial position, banks overdrafts are shown within borrowings in current liabilities.

2.13 SHARE CAPITAL

(a) Classification

Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity. Other shares are classified as equity and/or liability according to the economic substance of the particular instrument.

(b) Share issue costs

Incremental costs directly attributable to the issue of new shares or options are deducted against share premium account.

(c) Dividend distribution

Distributions to holders of an equity instrument are debited directly to equity, net of any related income tax benefit and the corresponding liability is recognised in the financial period in which the dividends are approved.

2.14 FINANCIAL LIABILITIES

Financial liabilities are recognised on the statement of financial position when, and only when, the Company becomes a party to the contractual provisions of the financial instrument.

Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities other than derivatives, directly attributable transactions costs.

Subsequent to initial recognition, all financial liabilities are measured at amortised cost using the effective interest method except for derivatives which are measured at fair value.

For financial liabilities other than derivatives, gains and losses are recognised in profit or loss when the liabilities are de-recognised, and through the amortisation process.

Any gains or losses arising from changes in fair value of derivatives are recognised in profit or loss. Net gains or losses on derivatives include exchange differences.


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2.14 FINANCIAL LIABILITIES (CONTINUED)

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the financial period in which they are incurred.

A financial liability is de-recognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between initial recognised amount and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

2.15 CURRENT AND DEFERRED INCOME TAX

The tax expense for the financial period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group’s subsidiaries and associates operate and generate taxable income.

Deferred tax is recognised, using the liability method, on temporary differences arising between the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.




2.15 CURRENT AND DEFERRED INCOME TAX (CONTINUED)

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses or unused tax credits can be utilised.

Deferred tax is recognised on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred and income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.16 EMPLOYEE BENEFITS

(a) Short-term employee benefits

The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

Wages, salaries, paid annual leave and sick leave, bonuses, and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.

(b) Defined contribution plans

The Group’s contributions to defined contribution plans are charged to profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further payment obligations. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

(c) Defined benefit plans

The defined benefit liability recognised in the statements of financial position is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets, together with adjustments for actuarial gains/losses and unrecognised past service cost. The Group determines the present value of the defined benefit obligation and the fair value of any plan assets with sufficient regularity such that the amounts recognised in the financial statements do not differ materially from the amounts that would be determined at the end of the reporting period.


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2.16 EMPLOYEE BENEFITS (CONTINUED)

(c) Defined benefit plans (continued)

The defined benefit obligation, calculated using the projected unit credit method, is determined by independent actuaries, by discounting the estimated future cash outflows using market yields at the end of the reporting period on high quality corporate bonds which have currency and terms to maturity approximating the terms of the related liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.

Past service costs are recognised immediately in profit or loss, unless the changes to the plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortised on a straight line basis over the vesting period.

2.17 PROVISIONS

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation; and a reliable estimate of the amount can be made. Provisions are not recognised for future operating losses.

When the Group expects a provision to be reimbursed (for example, under an insurance contract), the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as finance cost expense.

2.18 REVENUE RECOGNITION

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of all taxes, returns, rebates and discounts and after eliminating sales within the Group.




2.18 REVENUE RECOGNITION (CONTINUED)

Revenue arising from the sale of hardware and software is recognised upon delivery of goods/services or when significant risk and rewards of ownership of goods are transferred to the customers. Revenue arising from the rendering of services is recognised in the period the services are rendered. Accrued unbilled revenue represents unbilled value of goods delivered and services rendered to be billed in accordance with respective terms and conditions agreed with customers.

Interest income on cash and bank balances is recognised using the effective interest method. Interest income on impaired loan and receivables is recognised using the original effective interest rate.

Dividend income is recognised when the right to receive payment is established. This applies even if they are paid out of pre-acquisition profits. However, the investment may need to be tested for impairment as a consequence.

2.19 LEASES

A lease is an agreement whereby the lessor conveys to the lessee in return for a payment, or series of payments, the right to use an asset for an agreed period of time.

(a) Accounting as a lessee

Finance leases

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of interest on the remaining balance of the liability. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to the carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basis as the lease expense.


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2.19 LEASES (CONTINUED)

(a) Accounting as a lessee (continued)

Operating leases

Finance lease of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on the straight line basis over the lease period. Initial direct costs incurred by the Group in negotiating and arranging operating leases are recognised in profit or loss when incurred.

(b) Accounting as lessor

Finance leases

When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income.

Finance lease income is recognised over the term of the lease using the net investment method so as to reflect a constant periodic rate of return.

3 FINANCIAL RISK MANAGEMENT

3.1 FINANCIAL RISK FACTORS

The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group’s overall financial risk management objectives are to ensure that the Group creates value for its shareholders and to ensure that adequate financial resources are available for the development of the Group’s businesses. The Group operates within clearly defined objectives and seeks to minimise potential adverse effects on its financial performance. Financial risk is managed by the Managing Director and the respective key management personnel who in turn report to the Board of Directors on any significant risks and the resolution or mitigation of that risks.

It is, and has been throughout the current and previous financial years, the Group’s policy that no derivatives shall be undertaken where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.



3 FINANCIAL RISK MANAGEMENT (CONTINUED)

3.1 FINANCIAL RISK FACTORS (CONTINUED)

The following sections provide details regarding the Group’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Market risk

Market risk refers to the risk that changes in market prices such as foreign exchange rates, interest rates and prices that will affect the Group’s financial position and cash flows.

(i) Foreign exchange risk

The Group is exposed to risks arising from various currency exposures primarily with respect to the United States Dollar denominated borrowings and payables to suppliers. The Group’s policy is to minimise the exposure of transaction risk by making payments within credit terms which are short-term.

The table illustrates the impact on the profit for the year, equity and net assets resulting from currency sensitivities.

2013 2012 RM’000 RM’000

Increase/(decrease) on profit for the year, equity and net assets 1 percent increase in US Dollar exchange rate (222) (445)1 percent decrease in US Dollar exchange rate 222 445

(ii) Interest rate risk

The Group’s income and operating cash flows are substantially independent of changes in interest rates. Interest rate exposure arises from the Group’s borrowings and deposits, and is managed through the use of fixed rate borrowings and deposits with short-term tenure.


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(a) Market risk (continued)

(ii) Interest rate risk (continued)

The interest rate profile of the Group’s interest bearing financial assets and liabilities based on carrying amount as at the end of the reporting periods are shown in the table below:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Financial asset Fixed rate - deposits with financial institutions 24,947 6,191 16,603 103

Financial liability Fixed rate - borrowings 12,640 52,903 12,640 52,903

Other financial assets and financial liabilities are non-interest bearing and therefore are not affected by changes in interest rate.

(b) Credit risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group.

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amounts of each class of financial assets recognised in the statements of financial position.

(i) Receivables

The Group’s exposure to credit risk is monitored on an ongoing basis. The risk is managed through the application of the Group’s credit management procedures which include the application of credit approvals whereby credit evaluations are performed on customers requiring credit over a certain amount and period, adherence to credit limits and regular monitoring.

The Group’s customers are mainly significant entities in the information, communication and telecommunication industry. At the reporting date, the Group has significant concentration of credit risk that may arise from exposure to five (2012: seven) major customers which accounted for 51% (2012: 55%) of the trade receivables and accrued unbilled revenue balances. The Group considers the risk of material loss in the event of non-performance by a customer to be unlikely.





(b) Credit risk (continued)

(i) Receivables (continued)

The credit quality of trade receivables that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates. Accrued unbilled revenue represents unbilled value of goods delivered and services rendered to be billed in accordance with respective terms and conditions agreed with customers. Credit risk arising from non-trade receivables is not significant at the Group and Company level.

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Counterparties without external credit rating:- Existing customers with no defaults in the past 114,788 213,642 104,911 197,227

None of the trade receivables were secured by collateral provided by counterparty.

(ii) Intercompany balances

Intercompany balances with subsidiaries are largely trade in nature. The Company monitors the results of the subsidiaries regularly. As at 31 December 2013, the maximum exposure to credit risk is represented by their carrying amounts in the statements of financial position as shown in Note 18.

Management has taken reasonable steps to ensure that intercompany receivables are stated at realisable values. As at 31 December 2013, an amount of RM7,379,592 (2012: RM1,930,396) was provided for as the amount due from a subsidiary was assessed to be impaired.

(iii) Bank balances and deposits with licensed financial institutions

Bank balances and deposits with licensed financial institutions are with approved financial institutions and reputable banks.

As at the end of the reporting period, the maximum exposure to credit risk arising from cash and bank balances including deposits with licensed financial institutions is represented by the carrying amounts in the statements of financial position.


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(b) Credit risk (continued)

(iii) Bank balances and deposits with licensed financial institutions (continued)

In view of the sound credit rating of counterparties, management does not expect any counterparties to fail to meet their obligations. The credit quality of the financial institutions in respect of above balances is as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

AAA 14,521 11,363 1,705 2,803A 16,520 151 16,520 151BBB 15 0 15 0

The credit quality of the above bank balances and deposits with licensed financial institutions are assessed by reference to RAM Ratings Services Berhad and Moody’s.





(c) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group or the Company has sufficient cash and bank balances and maintains standby credit lines to ensure availability of funding to meet operational requirements. The Group’s borrowings and standby credit lines are provided by financial institutions with sound credit ratings.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2013

On demand or within One to two Two to five

one year years years Total RM’000 RM’000 RM’000 RM’000

Group

Financial Liabilities

Payables 34,951 0 0 34,951Borrowings 12,640 0 0 12,640Total undiscounted financial liabilities 47,591 0 0 47,591

Company


Payables 50,928 0 0 50,928Borrowings 12,640 0 0 12,640

Total undiscounted financial liabilities 63,568 0 0 63,568


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(c) Liquidity risk (continued)

2012

On demand or within One to two Two to five

one year years years Total RM’000 RM’000 RM’000 RM’000

Group




Company







3.2 CAPITAL MANAGEMENT

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the statements of financial position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the statements of financial position plus net debt.

2013 2012 RM’000 RM’000

Group

Total borrowings (Note 22) 12,640 52,903Less: Cash and cash equivalents (Note 20) (31,056) (11,514)

Net debt 0 41,389Total equity 177,225 193,300

Total capital 177,225 234,689

Gearing ratio 0% 18%

The decrease in the gearing ratio during 2013 resulted primarily from the decrease of borrowings during the financial year. There were no externally imposed capital requirements during the financial year.


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4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(a) Impairment of Property, Plant and Equipment, Investment Property, Intangible Assets (other than goodwill) and Investment in Subsidiaries

The Group assesses impairment of the assets mentioned above whenever the events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable i.e. the carrying amount of the asset is more than the recoverable amount. Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flow derived from that asset discounted at an appropriate discount rate.

Projected future cash flows are based on the Group’s estimates calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information. During the financial year, a reversal of impairment of investments in Mesiniaga MSC Sdn. Bhd. and Mesiniaga Services Sdn. Bhd. amounting to RM750,000 were recognised due to improvements in the financial performance of these companies.

(b) Deferred Tax Assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits together with future tax planning strategies.

Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject to risks and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences.

During the current financial year, the Group and Company have recognised deferred tax assets arising from unutilised tax losses amounting to RM1,739,000 and RM1,790,000 respectively as disclosed in Note 16 to the financial statements.

(c) Intangible assets

Intangible assets represent capitalised software development costs intended for sale in the property market. The estimates of future economic benefits is based on market studies and industry competitors. The software work-in-progress was tested for impairment in the current financial year based on expected revenues and gross margins and as a result thereof, no impairment was recorded.



5 REVENUE

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Revenue from: - hardware 120,220 116,354 101,027 108,227- software 43,762 56,627 43,762 56,627- services 117,025 153,369 117,479 142,324

281,007 326,350 262,268 307,178

6 STAFF COST (INCLUDING DIRECTORS’ EMOLUMENTS)

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Wages, salaries, bonuses and other employment benefits 71,040 74,911 39,597 45,977Defined contribution retirement plan 8,238 8,352 1.870 2,208Defined benefit retirement plan (Note 23) 560 514 560 514

79,838 83,777 42,027 48,699

Details of the defined contribution and defined benefit plans of the Group and the Company are set out in Note 23 to the financial statements.

The aggregate amount of emoluments received and receivable by Directors of the Group and the Company during the financial year is as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Non-executive Directors - fees 211 187 211 187- others 28 8 28 8 Executive Directors - salaries and bonuses 1,454 1,973 1,454 1,841- other emoluments 281 279 281 279- defined contribution plan 157 237 157 221

2,131 2,684 2,131 2,536


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7 PROFIT FROM OPERATIONS

Profit from operations is arrived at after charging/(crediting):

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Auditors’ remuneration: - Audit 205 190 107 96- Non-audit 58 43 29 12Depreciation:- property, plant and and equipment 7,316 6,791 2,264 2,388- investment property 24 25 24 25Amortisation of intangible assets 41 0 0 0Gross dividend income from subsidiaries 0 0 (14,033) (12,275)Interest income: - finance lease (102) (312) (102) (312)- others (482) (407) (241) (143)Net realised foreign exchange gain (616) (5,267) (615) (4,485)Unrealised foreign exchange gain (116) (141) (116) (138) Property, plant and equipment written off 14 0 6 0Reversal of impairment of investments in subsidiaries 0 0 (750) 0Rental income (115) (120) (355) (360)Rental expense 419 327 19 19Bad debts written off 224 2,323 224 2,323(Reversal)/impairment of receivables (341) 336 (317) 281Impairment of amount due from subsidiaries 0 0 5,449 0

8 FINANCE COST

Group and Company

2013 2012 RM’000 RM’000

Interest expense on: - bank overdraft 0 7- borrowings 809 714- finance leases 407 339

1,216 1,060



9 TAXATION AND ZAKAT

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Current tax: Current financial year 4,827 3,930 0 506Under-provision in prior year 781 0 800 0 Deferred tax: Reversal and origination of temporary differences (Note 16) (2,448) 57 (1,639) 65Over provision in prior year (185) 0 (36) 0

Tax expense 2,975 3,987 (875) 571Zakat 180 180 0 180

3,155 4,167 (875) 751

The reconciliation of income tax expense applicable to (loss)/profit before tax at Malaysian statutory income tax rate to income tax expense at the effective income tax rate of the Group and company are as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

(Loss)/Profit before tax after zakat (2,830) 15,606 (5,605) 11,298

Tax calculated at tax rate of 25% (2012: 25%) (707) 3,902 (1,401) 2,824Tax effects of:- zakat 180 180 0 180- income not subject to tax (1,116) (438) (4,276) (2,750)- expenses not deductible for tax purposes 369 391 1,683 497- effect of deferred tax assets not recognised 3,784 132 2,355 0- under provision in prior year (net) 596 0 764 0

Tax expense 3,155 4,167 (875) 751


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9 TAXATION AND ZAKAT (CONTINUED)

The amount of unutilised tax losses and unabsorbed capital allowances for which no deferred tax assets is recognised in the statements of financial position is as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Unutilised tax losses 17,278 2,846 7,902 0Deductible temporary differences 1,923 405 1,518 0

19,201 3,251 9,420 0

The deductible temporary differences and unutilised tax losses are available indefinitely for offset against future taxable profits of the Group and the Company subject to agreement with the tax authorities. These tax benefits will only be obtained if the Group and Company derives future assessable income of a nature and amount sufficient for the tax benefits to be utilised. Deferred tax assets have not been recognised in respect of tax losses and deductible temporary differences of certain entities within the Group having a history of losses.

10 (LOSS)/EARNINGS PER SHARE

(Loss)/earnings per share (“EPS”) of the Group is calculated by dividing the net (loss)/profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

Group

2013 2012

Net (loss)/profit attributable to ordinary equity holders of the Company (RM’000) (7,644) 9,738Weighted average number of ordinary shares in issue (’000) 60,402 60,402 (Loss)/earnings per share (sen) (12.66) 16.12

Diluted EPS is the same as basic EPS in both financial years.



11 DIVIDENDS

Dividends paid during the financial year are as follows: Group and Company

2013 2012 RM’000 RM’000

Final dividends in respect of financial year 2012/2011: 21 sen per share, less income tax at 25% (2012: 21 sen per share, less income tax at 25%) 9,513 9,513

The Directors have recommended the payment of a final single tier dividend of 10 sen per share, amounting to RM6,040,200 subject to the approval of the members at the forthcoming Annual General Meeting.

The financial statements do not reflect the proposed final dividends for the financial year ended 31 December 2013, which will only be accrued as a liability in the financial year ending 31 December 2014, after approval by the shareholders.


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12 PROPERTY, PLANT AND EQUIPMENT

Office equipment, Freehold furniture Motor land Building Machines and fittings vehicle Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

31.12.2013

Cost At 1 January 2013 26,262 35,836 5,629 52,135 283 120,145Transfer to intangible asset 0 0 0 (253) 0 (253) Additions 0 0 0 3,468 0 3,468Assets written off 0 0 (4,460) (1,998) 0 (6,458)

At 31 December 2013 26,262 35,836 1,169 53,352 283 116,902

Accumulated depreciation At 1 January 2013 0 12,039 5,629 35,625 142 53,435Charge for the financial year 0 718 0 6,542 56 7,316Transfer to subsidiary 0 0 0 (34) 0 (34)Assets written off 0 0 (4,460) (1,982) 0 (6,444)

At 31 December 2013 0 12,757 1,169 25,104 198 54,307

Net book value At 31 December 2013 26,262 23,079 0 4,183 85 53,609



12 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)


Group

31.12.2012

Cost At 1 January 2012 26,262 35,836 5,629 46,198 155 114,080Additions 0 0 0 6,137 128 6,265Assets written off 0 0 0 (200) 0 (200)

At 31 December 2012 26,262 35,836 5,629 52,135 283 120,145

Accumulated depreciation At 1 January 2012 0 11,322 5,629 29,802 91 46,844Charge for the financial year 0 717 0 6,023 51 6,791Assets written off 0 0 0 (200) 0 (200)

At 31 December 2012 0 12,039 5,629 35,625 142 53,435



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Company

31.12.2013

Cost At 1 January 2013 26,262 35,836 5,629 29,886 283 97,896Additions 0 0 0 1,430 0 1,430Transfer to subsidiary 0 0 0 (41) 0 (41)Assets written off 0 0 (4,460) (1,988) 0 (6,448)

At 31 December 2013 26,262 35,836 1,169 29,287 283 92,837

Accumulated depreciation At 1 January 2013 0 12,039 5,629 25,630 142 43,440Charge for the financial year 0 718 0 1,490 56 2,264Transfer to subsidiary 0 0 0 (34) 0 (34)Assets written off 0 0 (4,460) (1,982) 0 (6,442)

At 31 December 2013 0 12,757 1,169 25,104 198 39,228






Company

31.12.2012

Cost At 1 January 2012 26,262 35,836 5,629 29,428 155 97,310Additions 0 0 0 1,203 128 1,331Transfer to subsidiary 0 0 0 (550) 0 (550)Assets written off 0 0 0 (195) 0 (195)

At 31 December 2012 26,262 35,836 5,629 29,886 283 97,896

Accumulated depreciation At 1 January 2012 0 11,322 5,629 24,572 91 41,614Charge for the financial year 0 717 0 1,620 51 2,388Transfer to subsidiary 0 0 0 (367) 0 (367)Assets written off 0 0 0 (195) 0 (195)

At 31 December 2012 0 12,039 5,629 25,630 142 43,440



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13 INTANGIBLE ASSETS

Internally developed Work in- software progress Total RM’000 RM’000 RM’000

Group

Cost At 1 January 2013 0 0 0Additions 0 1,005 1,005Transfer from property, plant and equipment 253 0 253Reclassification 387 (387) 0

At 31 December 2013 640 618 1,258

Accumulated depreciation At 1 January 2013 0 0 0Charge for the financial year 41 0 41

At 31 December 2013 41 0 41

Net book value At 31 December 2013 599 618 1,217

The useful life of the internally developed software is four years. The amount of staff cost capitalised in current financial year is RM1,005,000.

14 INVESTMENT PROPERTY

Group and Company

2013 2012 RM’000 RM’000

At 1 January 1,418 1,443Depreciation for the financial year (24) (25)

At 31 December 1,394 1,418



14 INVESTMENT PROPERTY (CONTINUED)

Investment property rental income and direct operating expenses for the financial year are as follows:

Group and Company

2013 2012 RM’000 RM’000

Rental income 39 45Direct operating expenses 4 3

The fair value of the investment property is approximately RM2,900,000 as at the end of the reporting period. The fair value of the investment property was estimated by Directors using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties.

15 INVESTMENT IN SUBSIDIARIES

Company

2013 2012 RM’000 RM’000

Unquoted shares, at cost 2,006 2,006Accumulated impairment losses (21) (771)

1,985 1,235

The shares of all subsidiaries are held directly by the Company.


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15 INVESTMENT IN SUBSIDIARIES (CONTINUED)

Details of the subsidiaries, all of which are incorporated in Malaysia, unless otherwise stated, are as follows:

Group’s effective interestNames of companies Principal activities 2013 2012 % %

Mesiniaga Services Sdn. Bhd. Provision of maintenanceand managed services 100 100 VA Dynamics Sdn. Bhd. Sales of networking cables and related products 51 51 CustomCodes Sdn. Bhd. Provision of design, development and 100 100 implementation of business solutions related to business intelligence, business analytics, customised applications and software products Mesiniaga MSC Sdn. Bhd. Provision of solution services and 100 100 technology research and development Mesiniaga Alliances Sdn. Bhd. Provision of strategic information 100 100 technology outsourcing services Mesiniaga Techniques Sdn. Bhd. Under members voluntary winding up 100 100 Mesiniaga SSO Sdn. Bhd. Under members voluntary winding up 100 100

All the above subsidiaries, other than those under members voluntary winding up, are audited by PricewaterhouseCoopers, Malaysia.



16 DEFERRED TAX ASSETS/LIABILITIES

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the statements of financial position:

Group Company

2013 2012 2013 2012 (restated) (restated) RM’000 RM’000 RM’000 RM’000

Deferred tax assets 1,781 360 1,458 0

Deferred tax liabilities: (1,846) (3,027) 0 (282)

At 1 January – as previously stated (3,037) (2,980) (652) (587)Effect of adoption of MFRS 119 (Note 30) 370 370 370 370

At 1 January - as stated (2,667) (2,610) (282) (217)Credited/(charged) to statements of comprehensive income (Note 9): - property, plant and equipment 291 157 (594) 263 - accruals 246 (316) 182 (432) - post-employment benefit obligations (90) 110 (90) 109 - receivables (296) (15) (14) 26 - tax losses 1,739 0 1,790 0 - others 284 (31) 0 (31) - provisions 466 0 466 0 - unabsorbed capital allowances (38) 38 0 0 2,602 (57) 1,740 (65)

At 31 December (65) (2,667) 1,458 (282)

Subject to income tax: Deferred tax assets(before offsetting): - post-employment benefit obligations 713 803 713 803 - receivables 167 463 158 172 - accruals 213 177 0 0 - tax losses 1,739 0 1,790 0 - unabsorbed capital allowance 0 38 0 0 - provisions 466 0 466 0 - others 311 0 0 0

3,609 1,481 3,127 975Offsetting (1,828) (1,121) (1,669) (975)

Deferred tax assets (after offsetting) 1,781 360 1,458 0


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16 DEFERRED TAX ASSETS/LIABILITIES (CONTINUED)

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities (before offsetting): - property, plant and equipment (3,645) (3,936) (1,641) (1,047)- accruals 0 (210) (28) (210)- others (29) (2) 0 0

(3,674) (4,148) (1,669) (1,257)Offsetting 1,828 1,121 1,669 975

Deferred tax liabilities (after offsetting) (1,846) (3,027) 0 (282)

17 INVENTORIES

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Equipment 3,139 10,843 2,098 9,674Spare parts 4,236 7,102 0 1Supplies 13 14 13 11Cables 8,426 7,643 1 1

15,814 25,602 2,112 9,687



18 TRADE AND OTHER RECEIVABLES

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Trade receivables 67,726 83,781 59,990 75,246Less: Impairment of receivables (552) (893) (521) (838)

67,174 82,888 59,469 74,408Accrued unbilled revenue 47,614 130,754 45,442 122,819Finance lease receivables (Note 19) 845 1,804 845 1,804Other receivables 5,041 2,396 3,669 1,178Deposits and prepayments 1,240 1,047 1,099 908Amounts due from subsidiaries 0 0 31,277 23,079Impairment of amounts due from subsidiaries 0 0 (7,379) (1,930)

0 0 23,898 21,149

121,914 218,889 134,422 222,266

The amounts due from subsidiaries consists of trade receivables amounting to RM21,201,000 (2012: RM11,955,000) and non-trade receivables amounting to RM2,697,000 (2012: RM9,194,000).

Trade receivables, other receivables and deposits are denominated in Ringgit Malaysia.

Credit terms of trade receivables range from 30 days to 90 days (2012: 30 days to 90 days).

Other receivables and deposits are neither past due nor impaired.

The Group’s and the Company’s historical experience in collection of trade receivables fall within the recorded impairment. Due to these factors, the Directors believe that no additional credit risk beyond amounts provided for collection losses is inherent in the Group’s and the Company’s trade receivables.


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18 TRADE AND OTHER RECEIVABLES (CONTINUED)

Aging analysis of trade receivables and accrued unbilled revenue

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Neither past due nor impaired 91,681 194,491 85,375 181,0901 to 30 days past due and not impaired 18,459 17,506 16,359 15,20831 to 90 days past due and not impaired 1,865 1,212 1,210 591More than 91 days past due and not impaired 2,783 433 1,967 338More than 91 days past due and impaired 552 893 521 838

115,340 214,535 105,432 198,065Less: Impairment of receivables (552) (893) (521) (838)

114,788 213,642 104,911 197,227

Trade receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment history. A significant number of these debtors are significant entities within the information, communication and technology industry. None of the Group’s and the Company’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Trade receivables that are past due but not impaired

As at 31 December 2013, the Group and the Company have trade receivables amounting to RM23,107,000 (2012: RM19,151,000) and RM19,536,000 (2012: RM16,137,000) respectively that are past due at the reporting date but not impaired.

Trade receivables that were past due but not impaired relate to customers that have a track record with the Group and the Company. Based on past experience and no adverse information to date, the Directors of the Group and Company are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are still considered fully recoverable.



18 TRADE AND OTHER RECEIVABLES (CONTINUED)

Trade receivables that are impaired

The Group’s and the Company’s trade receivables that are impaired as at 31 December 2013 and the movement of the allowance accounts to record the impairment are as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Trade receivables - nominal amounts 552 893 521 838Less: Impairment of receivables (552) (893) (521) (838)

0 0 0 0

These primarily relate to a few industrial customers who are in financial difficulties.

Movement in impairment of receivables:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

At 1 January 893 557 838 557(Reversal)/impairment of receivables (341) 336 (317) 281

At 31 December 552 893 521 838

Amounts due from subsidiaries that are impaired

Movement in impairment of amounts due from subsidiaries: Company

2013 2012 RM’000 RM’000

At 1 January 1,930 1,930Impairment of receivables 5,449 0

At 31 December 7,379 1,930


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19 FINANCE LEASE RECEIVABLES

Group and Company

2013 2012 RM’000 RM’000

Gross receivables 1,626 3,135Less: Unearned finance income (169) (190)

Present value of lease receivables 1,457 2,945

The present value of lease receivables may be analysed as follows: Group and Company

2013 2012 RM’000 RM’000

Receivable within 12 months 845 1,804Receivable after 12 months: - between 1 and 2 years 631 1,331- between 2 and 5 years 150 0

1,626 3,135Less: Unearned finance income (169) (190)

1,457 2,945

Current (Note 18) 845 1,804Non-current 612 1,141

1,457 2,945

The weighted average effective interest rates for finance lease receivables are 5% (2012: 5%) per annum. The finance lease receivables are denominated in Ringgit Malaysia.



20 CASH AND CASH EQUIVALENTS

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Cash and bank balances 6,109 5,323 1,638 2,851Deposits with licensed financial institutions 24,947 6,191 16,603 103

31,056 11,514 18,241 2,954

Bank balances are deposits held at call with banks and earn no interest.

The Group’s and the Company’s effective weighted average interest rate of deposits at the end of the financial year is 3% (2012: 3%) per annum.

Deposits of the Group and the Company as at 31 December 2013 are time deposits, which have an average maturity period of 92 days (2012: 90 days).

Cash and cash equivalents are denominated in Ringgit Malaysia.

21 TRADE AND OTHER PAYABLES

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Trade payables 26,892 53,054 25,934 49,493Payroll liabilities 4,978 6,354 2,740 3,287Accruals 3,081 1,782 882 985Finance lease liabilities (Note 24) 4,809 9,932 4,809 9,932Amounts due to subsidiaries 0 0 21,372 15,837

39,760 71,122 55,737 79,534

The currency exposure profile of trade payables is as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 16,222 45,449 18,442 41,981United States Dollar 10,670 7,605 7,492 7,512

26,892 53,054 25,934 49,493


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21 TRADE AND OTHER PAYABLES (CONTINUED) All other liabilities are denominated in Ringgit Malaysia.

Credit terms of trade payables range from 7 days to 90 days (2012: 7 days to 90 days).

Amounts due to subsidiaries are unsecured, interest-free and repayable on demand.

22 BORROWING (UNSECURED AND INTEREST BEARING)

Group and Company

2013 2012 RM’000 RM’000

Short-term bank borrowings 12,640 52,903

The interest rate of the short-term bank borrowing is as follows:

Group and Company

2013 2012 % %

Short-term bank borrowings 2.82 2.25

The carrying amount of the Company’s borrowings are denominated in the following currencies:

Group and Company

2013 2012 RM’000 RM’000

Ringgit Malaysia 2,853 18,867United States Dollar 9,787 34,036



23 POST-EMPLOYMENT BENEFITS OBLIGATIONS

(a) Defined contribution plan

The Company and its subsidiaries, which are all incorporated in Malaysia, contribute to the Employees’ Provident Fund, the national defined contribution plan. Once contributions have been paid, the Group has no further payment obligations.

(b) Defined benefit plan

The Company operates a funded defined benefit plan, which is an approved defined benefit plan under Section 150 of the Income Tax Act, 1967. The defined benefit plan is applicable for eligible employees who have completed at least 15 years of service at the time of retirement and are employed prior to 2 July 2002.

The assets of the funded plan are held in separate trustee administered funds. The latest actuarial valuation of the plan was carried out as at 31 December 2013.

The movement in the present value of defined benefit obligation during the financial year is as follows:

Group and Company

2013 2012 RM’000 RM’000

At 1 January 6,460 6,566Service cost 321 281Interest cost 420 389Actuarial losses (400) 0Benefits paid from plan assets (509) (776)

At 31 December 6,292 6,460

The movement in the fair value of plan assets during the financial year is as follows:

Group and Company

2013 2012 RM’000 RM’000

At 1 January 3,034 3,260Interest income on plan assets 220 200Return on plan assets greater than discount rate 15 0Employer contributions 700 350Administrative expenses paid (39) 0Benefits paid from plan assets (509) (776)

At 31 December 3,421 3,034


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23 POST-EMPLOYMENT BENEFITS OBLIGATIONS (CONTINUED)

(b) Defined benefit plan (continued)

Retirement benefit charge was recognised within staff cost in the statements of comprehensive income. The amounts recognised in the statements of financial position may be analysed as follows:

Group and Company 2013 2012 RM’000 RM’000

At 31 December Present value of funded obligations 6,292 6,460Fair value of plan assets (3,421) (3,034)

Net liability 2,871 3,426

Plan assets are comprised as follows:

Group and Company 2013 2012 2013 2012 RM’000 % RM’000 %

At 31 December

Equity instruments 1,704 49 1,722 57Government bonds 813 24 816 27Cash and fixed deposit 202 6 425 14Others 722 21 71 2

Total 3,441 100 3,034 100

The reconciliation of net statement of financial position may be analysed as follows:

Group and Company 2013 2012 RM’000 RM’000

Net defined benefit liability - as previously stated 1,736 1,572Effect of adoption of MFRS 119 (Note 30) 1690 1,690

Net defined benefit liability - as restated 3,426 3,262Service cost recognised in profit or loss 360 281Net interest on net defined benefit asset recognised in profit or loss 200 233Re-measurement gain recognised in other comprehensive income (415) -Employer contributions (700) (350)

Net defined benefit at 31 December 2013 2,871 3,426





The expense recognised in the statements of comprehensive income may be analysed as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Service cost 360 281 360 281Interest cost 420 389 420 389Net interest income on plan assets (220) (177) (220) (177)Actuarial gain recognised during the financial year 0 21 0 21

Total defined benefit retirement plan 560 514 560 514Defined contribution retirement plan 8,238 8,352 1,870 2,208

Total included in staff cost (Note 6) 8,798 8,866 2,430 2,722

The present value of the defined benefit plan depends on a number of factors that are determined on an actuarial basis using a number of assumptions as follows. Any changes in any of these assumptions would impact the carrying amount of the defined benefit obligations. In determining the appropriate discount rate, the Company considers the interest rates of government deposits, bonds and securities denominated in Ringgit Malaysia, and that have maturity approximating the terms of the related defined benefit liability.

Group and Company

2013 2012 % %

Discount rates 5.7 6.0Rate of price inflation 3.5 3.5Expected rate of salary increases - up to age 34 7 7- from age 35 to 44 7 6- from age 45 and above 5 4Turnover (per annum): - up to age 44 6 10- from age 45 to 54 3 0Retirement age: - normal retirement age, 60 50 50- early retirement age, 55 50 50Expected return on plan assets 220 177


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The expected return on plan assets is determined by weighting the expected long-term return for each asset class by target allocation of assets to each class. The returns used for each class are net of investment tax and investment fees.

24 FINANCE LEASE LIABILITIES

This represents future instalments under finance lease agreements, repayable as follows:

Group and Company

2013 2012 % %

Minimum lease payments:Repayable within 12 months 4,994 10,435 Repayable after 12 months: - between 1 and 2 years 466 4,727- between 2 and 5 years 157 0

5,617 15,162Future finance charges on finance leases (237) (644)

Present value of the finance lease liability 5,380 14,518

Current (Note 21) 4,809 9,932Non-current 571 4,586

5,380 14,518

The finance lease liabilities are secured as the rights to the leased assets revert to the lessor in the event of default.



25 SHARE CAPITAL

Group and Company

2013 2012 RM’000 RM’000

Ordinary shares of RM1.00 each:Authorised: At 1 January and 31 December 100,000 100,000

Issued and fully paid: At 1 January and 31 December 60,402 60,402

26 RETAINED EARNINGS

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the Section 108 balance and opt to pay dividends under the single tier system.

The Company did not elect for the irrevocable option to disregard the Section 108 balance during the transition periods.

Following the expiration of transition period on 31 December 2013, the Company will be able to distribute dividends out of its entire retained earnings under the single-tier system

In addition, the Company has tax exempt income as at 31 December 2013 arising from the Income Tax (Amendment) Act, 1999, relating to tax on income earned in 1999 being waived and first tier exempt dividend income amounting to approximately RM1,016,520 and RM832,500 (2012: RM1,016,520 and RM832,500) respectively available for distribution as tax exempt dividends to shareholders. This tax exempt income is subject to agreement by the tax authorities.

27 SHARE PREMIUM (NON-DISTRIBUTABLE)

Share premium is in respect of the Company’s equity, the consideration received more than par value of the share, is credited into the share premium account.

Share premium is not distributable as cash dividends.


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28 SIGNIFICANT RELATED PARTY DISCLOSURES

In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions.

(a) The significant related party transactions are as follows:

Group and Company

2013 2012 RM’000 RM’000

Related party

Subsidiary companiesPurchase of goods 803 292Purchase of services 100,661 63,815Sales of goods 142 13,596Management fees 3,416 2,448Secondment fees 18,470 25,458

(b) Financial year-end balances arising from sales/purchases of goods/services

Company

2013 2012 RM’000 RM’000

Receivables from related parties (Note 18): - Subsidiaries 23,898 21,149 Payables to related parties (Note 21): - Subsidiaries 21,372 15,837

The receivables from related parties arise mainly from sale transactions and are due two months after the date of sales. The receivables are unsecured in nature and bear no interest. No provisions are held against receivables from related parties.

The payables to related parties arise mainly from purchase transactions and are due two months after the date of purchase. The payables bear no interest.



28 SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)

(c) Key management compensation

Key management are categorised as Directors and above within the Group. The key management compensation (excluding Directors’ remuneration) is disclosed as follows:

Group Company

2013 2012 2013 2012 RM’000 RM’000 RM’000 RM’000

Salaries and other short-term employees benefits 2,442 2,414 1,435 1,202Defined contribution plan 286 286 168 143Defined benefit plan 39 33 0 33

2,767 2,733 1,603 1,378

There are no significant balances from or to key management personnel as at the end of the financial year. Refer to Note 6 to the financial statements for details of Directors’ remuneration.

29 SEGMENT REPORTING

The Group is primarily engaged in one operating segment, namely the sales and service of information technology products in Malaysia. Accordingly, there are no differing risks and returns in the sales of products and provision of services by its operating segment.

the reports provided and reviewed by the Managing Director (‘MD’) that are used for allocating resources and assessing performance of the operating segments are from the overall Group’s perspective and represents its only reporting segment.

All non-current assets of Group and Company are located in Malaysia.


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30 CHANGE IN ACCOUNTING POLICY

During the financial year, the Group and Company adopted MFRS 119 “Employee Benefits”. The effects of the adoption is as follows:

Post- Deferred tax employment Retained assets/ benefits earnings liabilities obligations RM’000 RM’000 RM’000

Group At 31 December 2012 - as previously reported 120,062 3,397 1,736Adoption of MFRS 119 (1,320) (370) 1,690

At 31 December 2012 – as restated 118,742 3,027 3,426

At 1 January 2012 - as previously reported 119,837 3,005 1,572Adoption of MFRS 119 (1,320) (370) 1,690

At 1 January 2012 – as restated 118,517 2,635 3,264

Company At 31 December 2012 - as previously reported 93,124 652 1,736Adoption of MFRS 119 (1,320) (370) 1,690

At 31 December 2012 – as restated 91,804 282 3,426

At 1 January 2012 - as previously reported 92,090 587 1,572Adoption of MFRS 119 (1,320) (370) 1,690

At 1 January 2012 – as restated 90,770 217 3,262

31 APPROVAL OF FINANCIAL STATEMENTS

The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on 31 March 2014.


32 SUPPLEMENTARY INFORMATION DISCLOSED PURSUANT TO BURSA MALAYSIA SECURITIES BERHAD LISTING REQUIREMENTS

The breakdown of retained earnings of the Group and of the Company as at 31 December, into realised and unrealised profits, pursuant to Paragraph 2.03 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:

Group Company

2013 2012 2013 2012 restated restated RM’000 RM’000 RM’000 RM’000

Realised 86,647 105,966 61,100 76,646Unrealised 15,353 12,776 16,876 15,158

102,000 118,742 77,976 91,804

The determination of realised and unrealised profits is based on the Guidance of Special Matter No 1, Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

SUPPLEMENTARY INFORMATION


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PROPERTIES OWNED BY THE GROUP as at 31 December 2013

Address Description Usage Tenure

Terms of Tenant’s Leases or Under Leases

Approximate Age

Net Book Value

(RM’000)

HS(D) 65056, PT 12204, Mukim of Damansara, District of Petaling, Selangor(Menara Mesiniaga, 1A, Jalan SS16/1, 47500 Subang Jaya, Selangor)

Commercial land comprising a 15-storey office building

Office building

Freehold Nil Twenty (20) years

34,840

Lot 1047, Sek. 13, District of Timur Laut, Georgetown, Pulau Pinang (Mutiara Mesiniaga, No. 56, Jalan Larut, 10050 Georgetown, Pulau Pinang)

Commercial land comprising a 4-storey office building

Office building

Freehold Nil Thirteen (13) years

8,838

Lot PT 277, Mukim of Damansara, District of Petaling, Selangor(No. 3, Jalan TP 6, Taman Perindustrian UEP Subang Jaya, 47600 Subang Jaya, Selangor

Industrial premises

Office building and store

Freehold Nil Six (6) years

5,663

No. A-07-01, A-07-02, A-07-03, Worldwide @7,Jalan Lazuardi 7/29, Seksyen 7, 40000 Shah Alam, Selangor

Commercial land comprising a 3 1/2-storey commercial building

Commercial building

Leasehold 99 years Ten (10) years 1,394

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SHAREHOLDINGSTATISTICS

Size of Shareholding No. of Shareholders

% of Shareholders

No. of Shares % of Issued Share Capital

Less than 100 45 1.44 1,449 0.00

100 – 1,000 1,154 37.00 1,054,998 1.75

1,001 – 10,000 1,571 50.37 6,756,216 11.19

10,001 – 100,000 307 9.84 8,549,000 14.15

100,001 – 3,020,100 (Less than 5% of issued shares)

39 1.25 22,645,096 37.49

3,020,101 and above (5% and above of issued shares)

3 0.10 21,395,241 35.42

Total 3,119 100.00 60,402,000 100.00

Shareholding Structure as at 15 April 2014Authorised Share Capital : RM100,000,000Issued and Paid-up Capital : RM60,402,000 Class of Shares : There is only one class of shares, namely Ordinary Shares of RM1.00 each

Analysis of Shareholdings as at 15 April 2014

Substantial Shareholders (Excluding Bare Trustees and Deemed Interests) as at 15 April 2014

No. Names Direct Shareholdings %

1 AMANAHRAYA TRUSTEES BERHAD <SKIM AMANAH SAHAM BUMIPUTERA>

11,335,249 18.77

2 FATHIL SULAIMAN ISMAIL 6,397,939 10.59

3 SAFIAH SULAIMAN ISMAIL 3,662,053 6.06

Directors Direct and Deemed Interests as at 15 April 2014

No. Names Direct Shareholdings Deemed Interest %

1 DATUK WAN MOHAMED FUSIL WAN MAHMOOD 1,675,940 2,050,0001 6.17

2 MOHAMED FITRI ABDULLAH 0 0 0.00

3 MOHD PUZI AHAMAD 1,918,940 2,000,0002 6.49

4 FATHIL SULAIMAN ISMAIL 6,397,939 0 10.59

5 VOON SENG CHUAN 300,500 0 0.50

6 ABD TALIB BABA 0 0 0.00

7 WONG FOOK HON 1,000 0 0.00

8 DATO’ AB RASHID MAT ADAM 0 0 0.00

8 IR. DR. MUHAMAD FUAD ABDULLAH 0 0 0.00

1 Interest held under his nominee accounts with Citigroup Nominees (Tempatan) Sdn. Bhd., CIMB Islamic Trustee Berhad, Alliance group Nominees (Tempatan) Sdn. Bhd. and Cimsec Nominees (Tempatan) Sdn. Bhd.

2 Interest held under his nominee accounts with CIMB Islamic Trustee Berhad.


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30 Largest Shareholders as at 15 April 2014

No Name Holdings (%)

1 AMANAHRAYA TRUSTEES BERHAD <SKIM AMANAH SAHAM BUMIPUTERA> 11,335,249 18.77

2 FATHIL SULAIMAN ISMAIL 6,397,939 10.59

3 SAFIAH SULAIMAN ISMAIL 3,662,053 6.06

4 HOR YEE @ HO CHEONG FATT 2,828,940 4.68

5 PHARIDA SULAIMAN @ PHILOMENA SULAIMAN 2,699,976 4.47

6 CIMB ISLAMIC TRUSTEE BERHAD <MOHD PUZI AHAMAD> 2,000,000 3.31

7 MOHD PUZI AHAMAD 1,918,940 3.18

8 WAN MOHAMED FUSIL WAN MAHMOOD 1,675,940 2.77

9 DB (MALAYSIA) NOMINEE (ASING) SDN BHD <DEUTSCHE BANK AG SINGAPORE FOR BRITISH AND MALAYAN TRUSTEES LIMITED (YEOMAN 3-RIGHTS)>

1,450,000 2.40

10 WONG TA NOOY @ WONG KENG YONG 1,175,000 1.95

11 CIMB ISLAMIC TRUSTEE BERHAD <WAN MOHAMED FUSIL WAN MAHMOOD> 1,000,000 1.66

12 CITIGROUP NOMINEES (ASING) SDN BHD <UBS AG FOR NEON LIBERTY WEI JI MASTER FUND LP> 654,000 1.08

13 SRI SUSAYATI RAMLAN 620,000 1.03

14 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD <PLEDGED SECURITIES ACCOUNT FOR WAN MOHAMED FUSIL WAN MAHMOOD> 550,000 0.91

15 CHOY CHOONG YEEN 481,500 0.80

16 CITIGROUP NOMINEES (TEMPATAN) SDN BHD <PLEDGED SECURITIES ACCOUNT FOR WAN MOHAMED FUSIL WAN MAHMOOD (473685)> 400,000 0.66

17 TOH KAM CHOY 396,000 0.66

18 LIM POH TIONG 360,000 0.60

19 NEOH CHOO EE & COMPANY SDN BHD 354,100 0.59

20 LIM POH TIONG 340,000 0.56

21 VOON SENG CHUAN 300,500 0.50

22 NOR HASLINA MD. DAHARI 267,600 0.44

23 DB (MALAYSIA) NOMINEE (TEMPATAN) SDN BHD <DEUTSCHE TRUSTEES MALAYSIA BERHAD FOR HONG LEONG ASIA-PACIFIC DIVIDEND FUND> 242,300 0.40

24 HDM NOMINEES (ASING) SDN BHD <DBS VICKERS SECS (S) PTE LTD FOR LIM MEE HWA> 235,000 0.39

shareholding statistics


shareholding statistics

No Name Holdings (%)

25 PUBLIC NOMINEES (TEMPATAN) SDN BHD <PLEDGED SECURITIES ACCOUNT FOR WONG PHOOI YIN (E-TAI)>

225,000 0.37

26 CIMSEC NOMINEES (TEMPATAN) SDN BHD <CIMB BANK FOR GAN NYAP LIOU @ GAN NYAP LIOW (MY0747)>

215,000 0.36

27 GOH SEE WEE 200,000 0.33

28 LIM SENG GWEE 200,000 0.33

29 PROCRAFT SDN BHD 194,100 0.32

30 AFFIN NOMINEES (TEMPATAN) SDN BHD <PLEDGED SECURITIES ACCOUNT FOR LOO SWEE LIN>

183,600 0.30

30 Largest Shareholders as at 15 April 2014 (Continued)


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NOTICE OF 32ND ANNUALGENERAL MEETING

NOTICE IS HEREBY GIVEN that the Thirty-Second Annual General Meeting of the Company will be held at Auditorium Ismail Sulaiman, Menara Mesiniaga, 1A, Jalan SS16/1, 47500 Subang Jaya on Wednesday, 18 June 2014 at 2.30pm for the following purposes:

Agenda1. To receive the Independent Audited Financial Statements for the year ended 31 December 2013 together with the Reports

of Directors and Auditors Report thereon.

2. To approve a First and Final Single Tier Dividend of 10 sen for the year ended 31 December 2013. Resolution 1

3. To approve Directors’ Fees for the year ended 31 December 2013. Resolution 2

4. To re-elect Ir. Dr. Muhamad Fuad Abdullah, retiring pursuant to Article 104 of the Company’s Articles of Association. Resolution 3

5. To re-elect Mohamed Fitri Abdullah, retiring pursuant to Article 108 of the Company’s Articles of Association. Resolution 4

6. To re-appoint Messrs Pricewaterhouse Coopers as the Company’s Auditors and to authorise the Directors to fix their remuneration. Resolution 5

BY ORDER OF THE BOARD

JASNI ABDUL JALIL (MACS 01359)Company SecretarySubang Jaya19 May 2014

Note:

1. For the purposes of determining a member who shall be entitled to attend and vote at the forthcoming Thirty-Second Annual General Meeting of the Company, the Company shall be requesting the Record of Depositors as at 11 June 2014. Only a depositor whose name appears on the Record of Depositors as at 11 June 2014 shall be entitled to attend and vote at the meeting, as well as for the appointment of proxy(ies) to attend and vote on his/her stead.

2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation under its common seal or the hand of its attorney.

4. All forms of proxy must be deposited at the Company’s Share Registrar’s Office at Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time set for holding the meeting or any adjournment thereof.


1. As stated in the Notice of Annual General Meeting on page 133 of this Annual Report, the Directors standing for re-election pursuant to Article 104 and Article 108 are:

Pursuant to Article 104 of the Company’s Articles of Association:Ir. Dr. Muhamad Fuad Abdullah

Pursuant to Article 108 of the Company’s Articles of Association:Mohamed Fitri Abdullah

2. Details of Board Meetings and the attendance of Directors at those meetings are as stated on page 49.

3. The Thirty-Second Annual General Meeting of the Company will be held at Auditorium Ismail Sulaiman, Menara Mesiniaga, 1A, Jalan SS16/1, 47500 Subang Jaya on Wednesday, 18 June 2014 at 2.30pm.

4. Details of the Directors standing for re-election are as stated in the Directors’ profile column on pages 38 to 42. Their securities holdings in the Company are as stated on page 130.

ADDITIONALSTATEMENTS

NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the forthcoming Annual General Meeting, a first and final single tier dividend of 10 sen will be paid on 9 July 2014 to shareholders whose names appear in the Record of Depositors on 23 June 2014.

A Depositor shall qualify for entitlement to the dividend only in respect of:

a. Securities transferred into the Depositor’s securities account before 4.00pm on 23 June 2014 in respect of transfers; andb. Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia

Securities Berhad.

BY ORDER OF THE BOARD

JASNI ABDUL JALIL (MACS 01359)Company SecretarySubang Jaya19 May 2014

NOTICE OF DIVIDEND ENTITLEMENT

PROxYFORMI/We__________________________________________________________________of________________________________________

being a member of the abovementioned Company, hereby appoint _____________________of_______________________ or failing

him _________________________________________________________________of _______________________________as my/our

proxy to vote for me/us and on my/our behalf at the Thirty-Second Annual General Meeting of the Company, to be held on

Wednesday, 18 June 2014 at 2.30pm and at any adjournment thereof. The proxy is to vote on the resolutions set out in the Notice

of Meeting as indicated, with an “x” in the appropriate space. If no specific direction as to voting is given, the proxy will vote or

abstain from voting at his discretion.

Resolution For Against

To approve a First and Final Single Tier Dividend of 10 sen for the year ended 31 December 2013.

To approve Directors’ Fees for the year ended 31 December 2013.

To re-elect Ir. Dr. Muhamad Fuad Abdullah, retiring pursuant to Article 104 of the Company’s Articles of Association.

To re-elect Mohamed Fitri Abdullah, retiring pursuant to Article 108 of the Company’s Articles of Association.

To re-appoint Messrs Pricewaterhouse Coopers as the Company’s Auditors and to authorise the Directors to fix their remuneration.

_______________________Signature of Shareholder

Number of shares held

Note:For the purposes of determining a member who shall be entitled to attend and vote at the forthcoming Thirty-Second Annual General Meeting of the Company, the Company shall be requesting the Record of Depositors as at 11 June 2014. Only a depositor whose name appears on the Record of Depositors as at 11 June 2014 shall be entitled to attend and vote at the meeting, as well as for the appointment of proxy(ies) to attend and vote on his/her stead.

A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation under its common seal or the hand of its attorney. All forms of proxy must be deposited at the Company’s Share Registrar’s Office at Symphony Share Registrars Sdn. Bhd., Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

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STAMP

SYMPHONY SHARE REGISTRARS SDN. BHD.Level 6, Symphony House

Block D13, Pusat Dagangan Dana 1Jalan PJU 1A/46

47301 Petaling JayaSelangor Darul Ehsan

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MESINIAGA BERHAD (79244-V)

Menara Mesiniaga, 1A, Jalan SS16/147500 Subang Jaya, Selangor Darul Ehsan

Tel: 03-5635 8828 Fax: 03-5636 3838

www.mesiniaga.com.my

Documents

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